MARK4210 Class 14 pricing complete 3.27.19.ppt - MARK4210 Spring 2019 1 MARK 4210 Professor Eugene R Raitt Spring 2019 Pricing Strategy Course Roadmap

MARK4210 Class 14 pricing complete 3.27.19.ppt - MARK4210...

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Pricing Strategy MARK4210 Spring MARK4210 Spring 2019 2019 MARK 4210 Professor Eugene R. Raitt Spring 2019 1
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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
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Agenda The Importance of Pricing Common Pricing Strategies Review of Pricing Factors Differentiated Pricing MARK 4210 Professor Eugene R. Raitt Spring 2019 3
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The Importance of Pricing MARK 4210 Professor Eugene R. Raitt Spring 2019 4
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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
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Pricing Factors Company objectives Context Competition Cost Customers MARK 4210 Professor Eugene R. Raitt Spring 2019 7
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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
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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
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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
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