6_Price_and_distribution_of_financial_services

6_Price_and_distribution_of_financial_services - Price and...

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Price and distribution of financial services Krzysztof Chmielewski Department of Marketing [email protected]
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Pricing
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Agenda 1 Influences on Pricing Decision 2 Determining a Price Range 3 Managing Price Changes 4 Setting the Price Range
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What is Price head2right Price is the value of exchanged product or service, expressed in monetary or other terms head2right However, it is more than a number
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Factors influencing customer’s price assessments Quality Price Functional assessment Personal Operational Financial
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Financial Services Example
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Price Reflects Quality
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Price is the only element of the marketing mix that generates revenue! Profit = Total revenue – Total cost The Seller’s Perspective
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External Influences on Pricing Decision Demand/ elasticity Pricing Customers decision Channels of distribution Legal/ regulatory Competitors
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Price Elasticity Price elasticity is the responsiveness of demand to changes in prices. Elastic products are very responsive, so that a price increase leads to a fall in demand, while inelastic products are very unresponsive and thus a rise in price leads to little or no change in demand.
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The Classic Demand Curve
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Competitors Monopoly Oligopoly Monopolistic competition Perfect competition
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Channels of distribution An organization's approach to pricing has also to take into account the needs and expectations of the other members of the distribution chain. Each of them will have a desired level of profit margin and a requirement to cover the costs associated with handling and reselling the product (e.g. transport, warehousing or insurance).
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Customers and Consumers Different market segments react to price levels and price changes differently depending on the nature of the product, its desirability and the level of product loyalty established.
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Internal Influences on the Pricing Decision Pricing decision Costs Organisational objectives Marketing objectives
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Determining a Price Range Pricing objectives Demand assessment Pricing policies and strategies Setting the price range Pricing tactics and adjustments
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Price Tiers in the Ice Cream Market
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Phillips Van Heusen Brand Price Tiers Collection stores Specialty stores Premier department stores Department stores Mid-tier department stores Company stores Discount stores
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Criteria for Pricing Objectives Clearly defined Detailed Time specific Consistent
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Conflicting Price Objectives Price objectives Demand assessment Financial Sales and Marketing Survival
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