setting of price
- 1. Setting the price Presented by : Neha koul - Shumali - Vasudha dogra - 67 Vidhu arora - 68 Arjit gupta - 69 Anchal gupta - 70 Ridham mahajan -71
- 2. What is price ? Price is the one element of the marketing mix that produces revenue The amount paid for some goods and services. Pricing is the process whereby a business sets the price at which it will sell its products and services.
- 3. Steps in setting price Selecting the final price Selecting a pricing method Analyze competitors’ price , costs and offers Estimate costs Determine demand Select the Price Objective
- 4. Step 1: Selecting the Pricing Objective Survival Maximum current profit Maximum market share Maximum market skimming Product-quality leadership Clearer a firms’ objectives, easier it is to set the price. There are five major objective are :
- 5. Step 2: Determining Demand Price demand Sensitive : regular items Less sensitive: no substitute, Addiction, infrequently used items Price Sensitivity Surveys Price experiments Statistical analysis Estimating demand curve Elastic demand Inelastic demand Price elasticity of demand
- 6. Step 3: Estimating Costs Fixed Cost Variable Cost Total Cost Price which covers at least total cost of production at the given level of production is selected.
- 7. Step 4 :Analyze competitors’ costs, prices and offers
- 8. Offers Less features Subtract that value from their own price More features Add value to the competitors price
- 9. Step 5: Selecting a Pricing Method • costs set floor to the price • competitors prices and substitute prices provide an orienting point. • customers’ assessment of unique features establishes ceiling price. Consideration in price setting : 3C’s • Markup pricing • Target-return pricing • Perceived-value pricing • Value pricing • Everyday low pricing • Going rate pricing • Auction-type pricing Price setting methods :
- 10. Step 6: Selecting The Final Price Pricing methods narrow the range from which company must select its final price. Too high few buyers Priced right ??? Too low Too many buyers