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Unformatted text preview: Pricing strategy pyramid (top to bottom) price level, pricing policy (negotiation tactics and pricing setting procedures), value communication, pricing structure (metrics, fences, controls), value creation (econ value, offering design, segmentation) Price Setting Process preliminary segment pricing (divide into segments, similar benefit and similar value), optimization (usually relies on feedback from third stage), implementation Preliminary Segment Price key question: how much differential value should be captured in each segment? Answer: can differ substantially across segments based on strategic considerations and differences in price sensitivity. Other Questions: how much time and effort should I invest in assessing the value of my products? How should I adjust segment prices to account for different price sensitivities? Sets baseline prices based on type of value assessment and initial differential value capture rate. Economic value = reference value + positive differentiation + negative differentiationmust understand consumers and competitors Optimization refine preliminary prices with iterative process balancing tradeoffs between price, cost and market response. Key Questions: what tradeoffs should I make between long term strategic objectives and short term market responses to price changes? What types of analytical techniques are best suited to my product and market conditions? How can I estimate customer response to potential price changes? Implementation set final prices and ensure acceptance among customers and organizations through effective change management approach. Key Questions: what tradeoffs should I make between long term strategic objectives and short term market responses to price changes? What types of analytical techniques are best suited to my product what tradeoffs should I make between long term strategic objectives and short term market responses to price changes?...
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This test prep was uploaded on 03/18/2009 for the course MKTG 4820 taught by Professor Staff during the Fall '08 term at Colorado.
- Fall '08