Pricing Strategy
MARK4210 Spring
MARK4210 Spring
2019
2019
MARK 4210
Professor Eugene R. Raitt
Spring 2019
1
Situation Analysis
(Customer, Competitor, Company)
Market Selection
(Segmentation, Targeting, Positioning)
Marketing Mix Formulation
(Product, Distribution, Pricing, Promotion)
- Quantitative Analysis
- Consumer Behavior
Simulation Game
PharmaSim
Elements of Marketing Strategy
Fundamentals
Application
Course Roadmap
Course Roadmap
MARK 4210
Professor Eugene R. Raitt
Spring 2019
2
Agenda
The Importance of Pricing
Common Pricing Strategies
Review of Pricing Factors
Differentiated Pricing
MARK 4210
Professor Eugene R. Raitt
Spring 2019
3
The Importance of Pricing
MARK 4210
Professor Eugene R. Raitt
Spring 2019
4
Common Pricing Strategies
Profit-oriented strategies
Target profit
Target return on sales
Target return on investment
Cost-oriented
Cost-oriented
strategies
strategies
Standard markup /
Standard markup /
Cost-plus
Cost-plus
Experience curve
Experience curve
Demand-oriented
Demand-oriented
strategies
strategies
Skimming
Skimming
Penetration
Penetration
Prestige
Prestige
Competition-oriented
Competition-oriented
strategies
strategies
Loss leader
Loss leader
MARK 4210
Professor Eugene R. Raitt
Spring 2019
5
Pricing Factors
Company objectives
Context
Competition
Cost
Customers
MARK 4210
Professor Eugene R. Raitt
Spring 2019
7
Pricing Factors: Company
Objectives
Focus
Examples of Specific
Objectives
Profit Focus
•
Maximize long-term profits
•
Maximize short-term profits
Demand Focus
•
Create interest and build traffic
•
Signal the image/quality of the
product
•
Desensitize consumers to price
Market/
Competition
Focus
•
Increase market share
•
Stabilize market
•
Discourage new entrants
Source: Strategic Marketing Asia Edition, Jain & Haley, Cengage Learning, 2009
MARK 4210
Professor Eugene R. Raitt
Spring 2019
8
Pricing Factors: Context
Political
Government policy or restrictions
Economic situation
Inflation/deflation
Social
Natural disasters
Corporate social responsibility
MARK 4210
Professor Eugene R. Raitt
Spring 2019
9
Pricing Factors: Competition
Characteris
tics
Key Points
Number of
firms in the
industry
•
Firms with no competition can set any price
(subject to law)
•
Many active firms
fierce competition
limits
pricing discretion
•
