Steps in setting price 2002 Mc GrawHill Companies

  • Slides: 21
Download presentation
Steps in setting price © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Steps in setting price © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL © 2002 Mc. Graw-Hill Companies, Inc. ,

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL • Demand-Oriented Approaches • Skimming Pricing •

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL • Demand-Oriented Approaches • Skimming Pricing • Penetration Pricing • Prestige Pricing • Price Lining © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Demand curves for two types of demand-oriented approaches © 2002 Mc. Graw-Hill Companies, Inc.

Demand curves for two types of demand-oriented approaches © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL • Demand-Oriented Approaches • Odd-Even Pricing •

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL • Demand-Oriented Approaches • Odd-Even Pricing • Target Pricing • Bundle Pricing • Yield Management Pricing © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL • Cost-Oriented Approaches • Standard Markup Pricing

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL • Cost-Oriented Approaches • Standard Markup Pricing • Cost-Plus Pricing • Experience Curve Pricing © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL • Profit-Oriented Approaches • Target Profit Pricing

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL • Profit-Oriented Approaches • Target Profit Pricing • Target Return-on-Sales Pricing • Target Return-on-Investment Pricing © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL • Competition-Oriented Approaches • Customary Pricing •

STEP 4: SELECT AN APPROXIMATE PRICE LEVEL • Competition-Oriented Approaches • Customary Pricing • Above- At- or Below- Market Pricing • Loss-Leader Pricing © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 5: SET THE LIST OR QUOTED PRICE • One-Price versus Flexible-Price Policy ©

STEP 5: SET THE LIST OR QUOTED PRICE • One-Price versus Flexible-Price Policy © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

One-Price Policy © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

One-Price Policy © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 5: SET THE LIST OR QUOTED PRICE • Company, Customer, and Competitive Effects

STEP 5: SET THE LIST OR QUOTED PRICE • Company, Customer, and Competitive Effects • Company Effects § Product-line pricing • Customer Effects © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Frito-Lay Products Substitutes and complements: Information for product-line pricing © 2002 Mc. Graw-Hill Companies,

Frito-Lay Products Substitutes and complements: Information for product-line pricing © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 5: SET THE LIST OR QUOTED PRICE • Company, Customer, and Competitive Effects

STEP 5: SET THE LIST OR QUOTED PRICE • Company, Customer, and Competitive Effects (cont) • Competitive Effects § Price war • Balancing Incremental Costs and Revenues © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

The power of marginal analysis in real-world decisions © 2002 Mc. Graw-Hill Companies, Inc.

The power of marginal analysis in real-world decisions © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE © 2002 Mc.

STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE • Discounts •

STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE • Discounts • Quantity Discounts • Seasonal Discounts • Trade (Functional) Discounts • Cash Discounts © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Toro Ad Seasonal discounts © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Toro Ad Seasonal discounts © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

The structure of trade discounts © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

The structure of trade discounts © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE • Allowances •

STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE • Allowances • Trade-In Allowances • Promotional Allowances § Everyday low pricing • Geographical Adjustments • FOB Origin Pricing • Uniform Delivered Pricing • Basing-Point Pricing © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE • Legal and

STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE • Legal and Regulatory Aspects of Pricing • Price Fixing • Price Discrimination • Deceptive Pricing • Geographical Pricing • Predatory Pricing © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Pricing practices affected by legal restrictions © 2002 Mc. Graw-Hill Companies, Inc. , Mc.

Pricing practices affected by legal restrictions © 2002 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin