DEVELOPING PRICING STRATEGY AND PROGRAMSPart

3

How should a company adapt prices to meet varying circumstances and opportunities ?

Companies do not set a single price rather develop a price structure

4 Price adaption strategy

1Geographical pricing

Companies decide Different Price Structure

To Different locations and

countries

Price Discount and Allowance

2

Most companies give discounts and allowance

for volume purchase and off season

buying

Discount Quantity discount

Seasonal Discount Allowance

Promotional Pricing

3

Companies use several price techniques

to stimulate Early Purchase

Special event offerSpecial customer pricing

Low interest and EMI

Psychological Discount

Warranty and service

Differentiated Pricing

4

Price Discrimination occurs when a company sells the same

product or service at different prices

Customer segment pricing

Indian railway charge a lower price for senior

citizen

Product form Pricing

Bigger packet prices low

compared to cost of product

At Closing time same product is

sold at lower price

Time Pricing

Location Pricing

Price changes according to seat

preference

Same Coca Cola drink’s price is

higher in a restaurant or at

airport

Channel pricing

Is price discrimination is Legal ??

If the seller can prove its costs are different when selling different volumes

then it is legalalthough PREDATORY PRICING

are illegal

Selling below the cost

with intention of destroying competition

RECAP

Adapting the price

1.Geographical pricing2.Price Discount and Allowance3.Promotional Pricing4.Differentiated Pricing

Disclaimer

Created by Khemendra Raj Pingoliya, IIT Kanpur during an internship

by Prof. Sameer Mathur, IIM Lucknow.

www.IIMInternship.com

THANK YOU !!!