MARK4210 Class 14 pricing complete 3.27.19 (1).pdf - Pricing Strategy MARK4210 Spring 2020 MARK 4210 Professor Eugene R Raitt Spring 2020 1 Course

MARK4210 Class 14 pricing complete 3.27.19 (1).pdf -...

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Pricing Strategy MARK4210 Spring 2020 MARK 4210 Professor Eugene R. Raitt Spring 2020 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 MARK 4210 Professor Eugene R. Raitt Spring 2020 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 2020 3
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The Importance of Pricing MARK 4210 Professor Eugene R. Raitt Spring 2020 4
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Common Pricing Strategies Profit-oriented strategies Target profit Target return on sales Target return on investment n Cost - oriented strategies n Standard markup / Cost - plus n Experience curve n Demand - oriented strategies n Skimming n Penetration n Prestige n Competition - oriented strategies n Loss leader MARK 4210 Professor Eugene R. Raitt Spring 2020 5
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Pricing Factors Company objectives Context Competition Cost Customers MARK 4210 Professor Eugene R. Raitt Spring 2020 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 2020 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 2020 9
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Pricing Factors: Competition Characteristic s Key Points Number of firms in the industry Firms with no competition can set any price (subject to law) Many active firms à fierce competition à limits pricing discretion With few firms (especially undifferentiated industries), pricing usually set by industry leader Relative firm size
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