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0324536380_77289 - CHAPTER19 Pricing Strategies Chapter...

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Chapter Objectives Pricing Strategies CHAPTER    19 1 2 4 7 8 Compare the alternative pricing strategies and explain when each strategy is most appropriate. Describe how prices are quoted. Identify the various pricing policy decisions that marketers must make. Relate price to consumer perceptions of quality. Contrast competitive bidding and negotiated prices. Explain the importance of transfer pricing. Compare the three alternative global pricing strategies. Relate the concepts of cannibalization, bundle pricing, and bots to online pricing strategies. 5 3 6
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CHAPTER 19 Pricing Strategies PRICING STRATEGIES • Specific pricing strategies grow out of the overall marketing strategy. SKIMMING PRICING STRATEGY Skimming pricing strategy Pricing strategy involving the use of a high price relative to competitive offerings. • Commonly used as a market entry price for distinctive goods or services with little or no initial competition. • Example: When introduced, average price of HDTV with installation was $19,000. • Permits marketers to control demand but also attracts competitors. • Price declines can help marketers capture greater market share during late growth and early maturity stages.
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CHAPTER 19 Pricing Strategies PENETRATION PRICING STRATEGY Penetration pricing strategy Pricing strategy involving the use of a relatively low entry price compared with competitive offerings, based on the theory that this initial low price will help market acceptance. • Everyday Low Pricing—strategy devoted to continuous low prices as opposed to relying on short-term, price-cutting tactics such as cents-off coupons, rebates, and special sales.
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