Chapter 19

Chapter 19 - CHAPTER 19 Pricing Strategies Principles of...

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CHAPTER 19 Pricing Strategies Principles of Marketing Minneapolis Community and Technical College Instructor: Dave Skogstrom Office: Management Education Center, Room 1050 Phone: 612-659-6422 Email: www.dave.skogstrom@minneapolis.edu .
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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 Steps in Setting Price - chapter 18 slides examine the first 3 steps of the price setting process. Steps 4-6 are examined in Chapter 19. Slide 13-12
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CHAPTER 19 Pricing Strategies Pricing Strategies Remember, prices and pricing strategies grow out of your marketing strategies that you formulated to accomplish your organizational objectives. firms usually choose from three basic pricing strategies: 1. skimming 2. penetration 3. competitive pricing.
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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. • Also known as market-plus pricing. • 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. • Sometimes used throughout the life of the product, as with luxury goods. • Permits marketers to control demand but also attracts competitors.
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CHAPTER 19 Pricing Strategies • 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. • Sometimes called market-minus pricing. • Price level may increase to match competitors once product has recognition in the market. • Common among credit card firms, which offer low introductory rates which they later raise. • Competition may lower prices to counter this strategy. • Works best for goods and services that have:
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Chapter 19 - CHAPTER 19 Pricing Strategies Principles of...

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