Principles of Marketing_Chapter 11_Pricing Product_Pricing Strategies.pptx

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Chapter 11Pricing Strategies:Additional Considerations
New-Product PricingStrategies2
Market-Skimming PricingTo set a high price for a new product toskim maximum revenues layer by layerfrom the segment willing to pay the highprice; the company makes fewer but moreprofitable salesSeveral conditionsProduct’s quality and image, and enoughbuyersNot so high cost of producing a smallervolumeCompetitors not able to enter easily3
Market-Penetration PricingTo set a low price for a new product inorder to attract a large number of buyersand a large market shareSeveral conditionsHighly price sensitive marketProduction and distribution cost must fallThe low price in competition and thepenetration pricer4
Product Mix PricingStrategies5
Product Line PricingTo set the price steps between variousproducts in a product line based on costdifferences between the products,customer evaluations of differentfeatures, and competitors’ pricesPrice points for the products in their linesCustomers’ quality association betweenthe prices6
Optional-Product PricingThe pricing of optional or accessoryproducts along with a main product7
Captive-Product PricingTo set a price for products that must beused along with a main product, such asblades for a razors and film for a cameraIn thecase of service, the strategy iscalled two-part pricing – a fixed fee plus avariable usage rate8
By-Product PricingTo set a price for by-products in order tomake the main product’s price morecompetitive9
Product Bundle PricingTo combine several products and offer thebundle at a reduced price10

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Term
Fall
Professor
N/A
Tags
Pricing, high price

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