Pricing policy

Agenda:
About pricing policy
Odd-even pricing
Price skimming
Loss-leader pricing
Cost-based pricing
Value–based pricing
Demand-based pricing
Competition-based pricing

Pricing policy is one of the major determinants of a company's financial success

Prices can be determined in different ways
For example,
pure price competition (prices of meat, cotton and other agricultural prices)
by large companies (prices on industrial products (iron, steel, etc.))
by the government (for different public services-railroads, electricity, manufactured gas, bus services, etc.)

Odd-even pricing
Psychological pricing method based on the belief that certain prices or price ranges are more appealing to buyers.
For example, $49.95 instead of $50.00.

A product pricing strategy by which a firm charges the highest initial price that customers will pay.
Price Skimming
sold at $599.
reduced to $299.

A product priced below cost, or at a loss, in order to attract new customers is called a loss leader.
Loss-leader pricing

“If you're a retailer, you'll be very aware that sometimes consumers need a little bit of extra encouragement to come through your door”

COST-BASED PRICING
The traditional pricing policy can be summarized by the formula:
Cost + Fixed profit percentage = Selling price.

VALUE-BASED PRICING
Value pricers adhere to the thinking that the optimal selling price is a reflection of a product or service's perceived value by customers, not just the company's costs to produce or provide a product or service

DEMAND-BASED PRICING
Managers concentrates on the behavior and characteristics of customers and the quality and characteristics of their products or services.

COMPETITION-BASED PRICING
With a competition-based pricing policy, a company sets its prices by determining what other companies competing in the market charge