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1 Chap. 18 Marketing 7e Lamb Hair McDaniel 2004 South-Western/Thomson Learning Objectives: http://road.uww.edu/road/naidug/260- 311/ Describe the procedure for setting the right price. Identify the legal and ethical constraints on pricing decisions. Explain how discounts, geographic pricing, and other special pricing tactics can be used to fine- tune the base price. Discuss product line pricing. Describe the role of pricing during periods of inflation and recession. Chapter 18: Setting the Right Price 2 Chap. 18 Marketing 7e Lamb Hair McDaniel 2004 South-Western/Thomson Learning Steps in Setting the Right Price Results lead to the right price Fine tune with pricing tactics Choose a price strategy Estimate demand, costs, and profits Establish pricing goals 1 3 Chap. 18 Marketing 7e Lamb Hair McDaniel 2004 South-Western/Thomson Learning Pricing Objectives Profit-Oriented Pricing Objectives Profit-Oriented Pricing Objectives Sales-Oriented Pricing Objectives Sales-Oriented Pricing Objectives Status Quo Pricing Objectives Status Quo Pricing Objectives 1 4 Chap. 18 Marketing 7e Lamb Hair McDaniel 2004 South-Western/Thomson Learning Price Strategy A basic, long-term pricing framework, which establishes the initial price for a product and the intended direction for price movements over the product life cycle. 1 5 Chap. 18 Marketing 7e Lamb Hair McDaniel 2004 South-Western/Thomson Learning Choosing a Price Strategy Basic Strategies Basic Strategies for for Setting Prices Setting Prices Status Quo Pricing Price Skimming Penetration Pricing 1 6 Chap. 18 Marketing 7e Lamb Hair McDaniel 2004 South-Western/Thomson Learning Price Skimming Situations Situations when when Price Price Skimming Skimming Is Is Successful Successful Unique Advantages/Superior Legal Protection of Product Blocked Entry to Competitors Technological Breakthrough Inelastic Demand 1 7 Chap. 18 Marketing 7e Lamb Hair McDaniel 2004 South-Western/Thomson Learning Penetration Pricing A pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the mass market. On Line http://www.iflyswa.com 1 8 Chap. 18 Marketing 7e Lamb Hair McDaniel 2004 South-Western/Thomson Learning Penetration Pricing Advantages Advantages Discourages or blocks competition from market entry Boosts sales and provides large profit ... View Full Document

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