Date post: | 13-Apr-2017 |
Category: |
Marketing |
Upload: | sameer-mathur |
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How should a company adapt prices to meet varying circumstances and opportunities?
Companies do not set a single price but rather develop a pricing structure
Structure reflects the variations in
• Geographical demand and costs• Market-segment requirements• Purchase timings• Order levels• Delivery frequency • Service contracts, etc.
Pricing for rural markets• No compromise on quality• Lesser quantity• ‘Coinage’ pricing
Geographical Pricing4 important price adapting strategies:
Barter, Compensation deal, Buyback arrangement, Offset, Countertrade, etc.
Price discounts and allowancesDiscount, Quantity discount, Functional discount, Seasonal discount, Allowance
Risks of discounting• Discounting may become the norm• Undermining the value perceptions of
offerings• Self-destruction by always being on
sale• Losing long-run profits
Promotional Pricing
Types• Loss-leader pricing• Special event pricing (Diwali, Christmas
offers)• Psychological discounting• Longer payment terms (Low EMI auto’s)• Special customer pricing (Platinum Debit
Card)• Cash rebates• Warranties and service contracts
Differentiated Pricing The three degrees of price discrimination
Elements• Customer-segment pricing• Product-form pricing• Image pricing• Channel pricing• Location pricing• Time pricingBeware of legal issues!!
Recap-Price adapting strategies
• Geographical pricing (Cash, Countertrade)
• Price discounts and allowances• Promotional pricing• Differentiated pricing
References and Credits• Marketing management – Philip Kotler• https://www.flickr.com/search/?
text=adapting• http://
digital-photography-school.com/wp-content/uploads/2014/02/paper-and-pen.jpg
• https://ncpedwin.files.wordpress.com/2011/03/spry_sachet.jpg
• http://www.slb.com/contact_us/~/media/Images/contact/contact_sales_map2_updated.ashx?w=433&h=240&as=1
Disclaimer
Created by Mohith Reddy, IIT Madras
during an internship by Prof. Sameer Mathur, IIM Lucknow.
www.IIMInternship.com