What is Price The value in money or its equivalent for the exchange of a good or service psychological impact of pricing Psychological impact of pricing is the customers emotional response to the price ID: 1027743
Download Presentation The PPT/PDF document "Advanced Marketing Pricing Products and ..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
1. Advanced MarketingPricing Products and Services
2. What is Price?The value in money (or it’s equivalent) for the exchange of a good or service.
3. psychological impact of pricingPsychological impact of pricing is the customer’s emotional response to the priceCustomers’ perception shapes how a marketer determines price of product or service
4. Strategies for Psychological PricingPrestige PricingOdd-Even PricingMultiple Unit PricingBuy One Get One (BOGO)Every Day Low Price (EDLP)
5. Class ActivityWork individually or with a partner. Select one of the psychological pricing strategies identified in previous slide.Research the pricing strategy and identify the following:Explanation of the strategyExamples of businesses that use that strategyHow the strategy works to motivate the customer to buy and why is it a successful strategyCreate a PPT slide that summarizes the information on ONE SLIDEStudents will come back together as a large group and discuss their findings 50 Point assignment
6. Prestige Pricing
7. Odd-Even Pricing
8. Multiple Unit Pricing
9. Buy One get one free
10. Every day Low Pricing
11. Class ProjectWork with a partner and identify a product or group of products and apply psychological pricing to that product. Create the promotional piece to inform customers of the new pricingPrepare a PPT to present the pricing to the class.50 Point assignment
12. Impact of Price on Profitability Profit MarginCost of GoodsMarkupMarkdownGross ProfitNet Profit
13. Factors Impacting ProfitabilityBase Price- initial price of something; does not include taxes, shipping and handling, or other feesCost – value to produce; value to obtainCompetition-struggle between businesses for customersDemand- consumer willingness and ability to purchase something
14. Cost Oriented PricingCosts of acquiring or making product PLUS Expenses of doing business PLUS Projected profit margin Methods: Markup and Cost-Plus
15. Markup PricingResellers add a dollar amount (markup) to cost to arrive at priceExample: Item cost $10 and % of markup on cost is 40% ; retail price would be $14: ($10 x .40) = $4.00; $10 +$4 = $14
16. Cost-Plus PricingAll costs and expenses are calculated and then desired profit is added to arrive at price.Used primarily by manufacturers and service companiesMore sophisticated than markup pricing because all fixed and variable expenses are calculated separatelyWhen manufacturer is running at full capacity, fixed expenses allocated to each product becomes smaller.
17. Demand Oriented PricingDetermine what customers are willing to payConsumers’ perceived value is key to this methodRelies on basic premise of supply and demand
18. Competition-Oriented PricingOne of three actions after learning competitor price:Price Above CompetitionPrice Below CompetitionPrice In-Line with CompetitionCompetitive bid pricing is a type of competition-oriented pricing
19. Establishing base priceAll three pricing methods may be usedClass Activity:Determine the price for the following items in The Falcons’ Nest. You must use each method and explain why you selected that method:Ear Buds - Cost to Falcons Nest is $3.95Phone Charger- Cost to Falcons Nest is $9.95Orange/Navy Falcons’ Socks- $11.97