MARKETING MIX- PRICING

MARKETING MIX- PRICING
Market-Skimming Pricing: set high prices to "skim" revenues layer by layer from the market
e.g. Intel with it computer chips
Conditions that must be present in skimming:
quality and image
enough buyers
competitors should not be able to enter the market easily
Cost of producing small amounts must not prevent charging more

MARKETING MIX- PRICING
Market-Penetration Pricing:
set a low initial price in order to penetrate the market quickly and deeply. e.g. Dell computers
Conditions that must be present in penetration:
price sensitive mkt so that a low price produces more market growth
production and distribution costs must fall as sales volume increases
the low price must help keep out the competition

PRODUCT-MIX PRICING STRATEGIES
1) Product Line Pricing:
e.g. any model of a car is provided by several types of engine, 2.0, 2.5, 3.0, cost difference should not be significant
2) Optional-Product Pricing:
additional options will cost; basic options are included in the price
3) Captive-Product Pricing:
e.g. Gillette blades, or computer software
4) By-Product Pricing:
Petrol industry or sugar industry
5) Product-Bundle Pricing:
combine several of their products and offer the bundle at a reduced price . E.g. Computer with installed original windows and other software

PRICE-ADJUSTMENT STRATEGIES
1) Discount and Allowance Pricing:
a) cash discount e.g. %/date
b) quantity discount e.g. volume
c) functional discount or trade discount
e.g. selling, storing
d) seasonal discount e.g. out of the season
e) Allowances e.g. returning an old item when buying a new one
2) Segmented Pricing: selling at more than one price even costs are the same
a) Customer-segment Pricing e.g. buss prices, students pay less
b) Product-form Pricing e.g. A new Nokia phone model is 100$, the old one is 80$

PRICE-ADJUSTMENT STRATEGIES
c) Location Pricing e.g. a football mach ticket is priced differently, university prices, malls
d) Time Pricing e.g. Kcell evening time communication, hotels weekday and weekend
3) Psychological Pricing: e.g. 200$ vs. 199.95$
4) Promotional Pricing: e.g. actual price is 10$ but sold for 5$ to attract customers in hope that they will also buy other products
5) Value Pricing: e.g. Mc Donald's menu at the same price even with higher quality

PRICE-ADJUSTMENT STRATEGIES
6) Geographical Pricing:
a) FOB-origin Pricing e.g. price will change according to the distance of location
b) Uniform delivered Pricing exactly opposite of FOB
c) Zone Pricing e.g. company divides customers into zones, 2 or 3 zones, North and West
d) Basing-point Pricing e.g. a city as a basing-point
e) Freight-absorption Pricing e.g. seller absorbs all or part of the actual freight charges