Principles of Marketing - S7 - Pricing Strategy.pdf -...

2019/2020 -
Principles of Marketing – Pricing Strategy
Pricing Strategy
Professor Julien Schmitt
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2019/2020 -
Principles of Marketing – Pricing Strategy
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Main Definitions in Pricing
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Price Determination
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Pricing Strategies
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Price Promotion
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New Trends in Price Determination
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2019/2020 -
Principles of Marketing – Pricing Strategy
Pricing
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Another P of the marketing mix is “price”. It represents decisions relative
to the amount of money that consumers will have to spend to acquire the
product. In this regards, it also is an important element of the positioning
of the brand. Price is still part of Step 3 of the marketing process (offer
formulation and implementation).
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2019/2020 -
Principles of Marketing – Pricing Strategy
Main Definitions in Pricing
° Price Definitions
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Definition: Price represents the amount of money that consumers
must spend to buy a product/service. Like the other elements of the
marketing mix, price contributes to communicate the
product/service’s positioning.
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Particularities of price within the marketing mix : This variables
has however a specific place in the mix as it is the only one that
constitutes an income rather than an investment. Moreover, it is the
mix variable that is the quickest to modify.
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Importance : In difficult economic times, price is a variable that
consumers are specifically sensitive to
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Price and Value
Perceived value of a product/service by consumers represents the difference
between perceived benefits and perceived sacrifices associated to the au
product /service (cf. Session 1).
In this model, price is often considered as a perceived sacrifice. It can
however sometimes be seen as a benefit as a high price is sometimes
perceived by consumers as a sign a high quality, and consumers can
sometimes derive an emotional benefit from having bought an expensive
quality product.
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2019/2020 -
Principles of Marketing – Pricing Strategy
Main Definitions in Pricing
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Price and Psychology
Economists have for long considered that consumers apprehended price in
a rational way; considering it as a direct representation of the product’s
facial value. Actually, price perception is subject to numerous
psychological biases :
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Reference prices: consumers evaluate price using a reference price
that can be internal (based on memory, often wrong) or external
(based on environmental cues). There is a zone within which a