The pricing strategies of all telecom companies are monitored by telecom regulation authority of india to ensure fair prices are being charged to all customers. Product mix pricing strategy can further be distinguished into many types like product line pricing, optimal product pricing, captive product pricing, byproduct pricing, product bundle pricing. A product line refers to a unique product category or product brand a company offers. Upcoming schedule product strategy tuesday 322 lecture thursday 324 class discussion on truearth healthy foods. When the product is a part of product mix or portfolio, companies adopt five kinds of pricing strategies in marketing which are as under product line pricing this strategy is used for setting the price for entire product line. If your product or service is new to a market, you may, however, be able to set a higher price. Other pricing strategies in their search for the best price level, wow wees marketing managers could consider a variety of other approaches, such as costbased pricing, demandbased pricing, prestige pricing, and oddeven pricing. Another product strategy is to narrow the product mix, either by eliminating entire line or by simplifying the assortment with in a line. However, scholars have not paid enough attention to international and export pricing kotabe and aulak, 1993. Thereafter the promotional strategy, which encompasses the organisations integration of marketing communications or promotional elements, will be. The focus of this book is to present concepts, principles, and techniques that provide guidance to help a seller set the best price. Section 2 covers how to determine the price for a specific service or product and assign value to it.
Marketing management mcq pdf helps with theoretical, conceptual, and analytical study for selfassessment, career tests. Pricing is difficult because the various products have demand and cost interrelationships and are subject to different degrees of competition 5. Usually pricing strategies are put in place for the company to select a price which is fair for the product in question. The company was founded in the year 1984 by its cofounders frank angelo and frank toskan and in the year 1998. As introduced in a previous chapter, one of the four ps in the marketing mix is price. You can use this calculator to price orders that include complex markups or product discounts, and to create detailed invoices. Benefits product marketing strategy is key to entering new, and expansion in existing, markets. An item is worth only what someone else is willing to pay for it. The objective is to provide you with a pricing toolbox, i.
Product and pricing strategies programs, courses aiu. Mac cosmetics is a subsidiary of its parent company estee lauder companies. Marginal cost pricing marginal cost pricing approach is common in evaluating the profitability of orders in case of firms with excess ie. Mix growth and marketing strategies product development and differentiation product pricing developing the marketing messages marketing communications developing the marketing plan. Pdf pricing strategy is the policy a firm adopts to determine what it will. When a product is part of a product mix, the strategy for setting a products price often has to be changed. Customer value price cost product product cost price value customer costbased pricing customer valuebased pricing. The objective is to eliminate lowprofit products and to get more profit from fewer products. Your selection of a pricing strategy should be based on your product, customer demand, the competitive environment.
Pricing products that must be used with the main product. This is the most easy and best notes about product mix pricing strategy for those who are marketing students. Some price decisions may involve complex calculation methods, while others are intuitive judgments. However, the price must generate enough revenues to cover costs in order for the product to be profitable. Marketing mix of mac cosmetics mac cosmetics marketing mix.
Optional product pricing product mix pricing strategies optional product pricing is the pricing of optional or accessory products along with a main product. In the next column are eight common pricing strategies. Pricing methods and models in excel instant downloads. This template helps sales professionals calculate the price of bulk orders. Examples for captive product pricing are razor blade cartridges and printer cartridges. Captive product pricing product mix pricing strategies. Our study of how to set the best prices will take the marketing approach. Companies use many different pricing strategies and price adjustments. Marketing mix analyzes authors like pruskus 2015, rad, akbari 2014, rahnama, beiki 20, ria 2011, sereikieneabromaityte 20, singh 2012 and others.
For example, when you look at a car brand such as audi, you will see a relation between the different series and their prices. Marketing management multiple choice questions and answers mcqs. We speak of captive product pricing when companies make product that must be used along with the main product. Product positioning, branding, and product line strategies. Analysis of pricing strategies for new product introduction. On the contrary, in optional product pricing, we should think of products that can be boughtsold with the main product. In a primitive society, the exchange value may be determined by trading a good for. In this chapter the role of pricing in the marketing mix is examined. Key factors influencing pricing strategies for small.
Pricing policy and strategies for consumer hightech products 39 product available without considering the auxiliary, he may buy the most expensive product. Pdf consumer preferences and productline pricing strategies. Under the marginal cost pricing, the relevant cost considered for pricing is the variable cost, the fixed cost is excluded from the calculation of the cost of the product. The firm searches for a set of prices that maximizes profits on the total mix. Goal 2 understand how companies find a set of prices that maximize profits 11 product mix pricing strategies. Product mix strategies product mix pricing strategies x involve adjusting prices to maximize the profitability for a group of products rather than for just one item. A p ricing strategy has a s goal to establish an optimum price with. Market research for a new product introduction pricing strategy tuesday 329 lecture. In many cases, you can buy optional or accessory products along with the main product. Also pricing becomes a difficult task as different products have different demands. There are other strategies like product mix pricing strategy and price adjustment strategy. The key to effective pricing is the same as the key to effective product, distribution, and promotion strategies. A product mix is a group of everything a company sells. Pricing is a critical element of the marketing mix and companies must make strategic choices about how to price their products to best achieve their business.
In such situations, firms are on a lookout for prices that would maximize the total profits of the product mix as such. Product mix and pricing pricesetting logic must be modified when, the product is part of a product mix. Since firms usually develop product lines rather than single products, product line pricing plays a decisive role in product mix pricing strategies. The concept of marketing mix marketing mix means the product, distribution, promotion and pricing strategies to produce and. July 2012 these lecture notes cover a number of topics related to strategic pricing. There are five common product line pricing strategies captive pricing, leader pricing, bait pricing, price lining, and price bundling. Any of these methods could be used not only to set an initial price but also to establish longterm pricing levels. It is associated with lifestyle and retail industry as it deals in the cosmetic sector. An emphasis is placed on its importance and sample applications from the literature in which pricing strategies were developed alongside with the development of a marketing strategy are present. Marketing mix is a greatest strategy for attaining competitive advantage for any firm. Strategies for marketing mix of 4ps for competitive advantage the marketing mix by 4ps is a conjuration and it can only be implemented by marketing managers.
Pricing strategy is a key variable in financial modeling, which determines the revenues achieved, the profits earned, and the amounts. Costplus pricing, oddeven pricing, prestige pricing, price bundling, sealed bid pricing, goingrate pricing, and captive pricing are just a few of the strategies used. This paper examines factors that affect pricing decision for export markets, and sheds light on international pricing strategies. Each product within the structure forms a part of the product mix. Free samples and discount coupons are often used to build this familiarity. Total number of items in the product mix of the company. Marketing communications, social media, and customer response. This book can help to learn and practice marketing. Analyzing the effectiveness of marketing strategies in the. These ambitions are in line with the goals of the eu, which is going to step up. The product mix constitutes not only a single product line but all the products within an organization. However, the product line is a subset of the product mix. For example, patanjali deals in different categories of products which include shampoo, flour, toothpaste, etc.
As a manager, you can follow a number of alternative pricing strategies. Section 1 goes through the key pricing structures to determine which works best for the organization and serviceproduct line. Hence, despite regulation, the most important aspect in the pricing strategy in the marketing mix of airtel is based on competitive pricing strategy. Other factors affecting the nature of pricing strategies are corporate image.
Product line pricing is more effective when there are ample price gaps between each category so that the consumer is well informed of the quality differentials. Pdf analysis of pricing strategies for new product. Marketing mix, commonly known as the mccarthys 1960 4ps. Sometimes organization instead of developing a complete new product improve and. Number of different product lines carries by the company. The success of a lo w price strategy depends on the number of clients attracted b y the product since the low margin should be co mpensated by a higher number of ite ms sold. Consumer preferences and productline pricing strategies. Pricing policy for consumer hightech products price is the only marketing mix variable that leads to profit, all other variables only generating expenses.
Developing pricing strategies 392 problems of pricing and financing international transactions 395 problems in multinational pricing 396. Pricing as an element of the marketing mix a nytime anything is sold, there must be a price involved. Product mix pricing strategies pricing the product mix. Major types of product mix strategies marketing notes. Second, given consumers preferences, is the current strategy of pricing product lines differently but offering all flavors within a product line at the same price. Thats because the best pricing strategies involve tinkering with your offerings. There are other strategies like product mix pricing strategy and price adjustment. Price lining and bundle pricing optional and captive product pricing product mix pricing strategies adjusting prices to maximize the. Pricing in the international marketplace requires a shrewd market strategy and companies need to define their pricing strategies, know their products, and understand the host countrys cultural and environmental factors. We will explain the 5 product mix pricing strategies at.
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