6_Price_and_distribution_of_financial_services

G transport warehousing or insurance customers and

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Unformatted text preview: ransport, warehousing or insurance). 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 level of product loyalty established. Internal Influences on the Pricing Decision Pricing decision Marketing objectives Organisational objectives Costs Determining a Price Range Pricing objectives Demand assessment Pricing policies and strategies Pricing tactics and adjustments Setting the price range Price Tiers in the Ice Cream Market Phillips Van Heusen Brand Price Tiers Collection stores Specialty stores Premier department stores Department stores Mid-tier department stores Company stores Discount stores Criteria for Pricing Objectives • • • • Clearly defined Detailed Time specific Consistent Conflicting Price Objectives Price objectives Demand assessment Financial Sales and Marketing Survival Financial Objectives Profit • Return on investment • Profit maximization Cash flow Sales and Marketing Objectives • Market share and positioning • Sales volume • Status quo New Product Pricing Strategies • Skimming Setting a high price to attract the least pricesensitive market segments • Penetration Using an aggressively low price to gain volume Market Skimming • Du Pont, Bang&Olufsen, Gucci • Setting prices on the highest level possible to maintain high margins and maximize returns • Less risky in financial terms, good for new, unknown products and markets with small segments • Competitors can always offer better value for money • Need for consistently high quality Price penetration • Texas Instruments, Bic • Setting prices on the lowest possible levels to maximize maximize market share • Ambitious and difficult strategy, very risky due to competitive retaliation and shifts in the target market Managing Price Changes 1 Implementing price price cuts Implementing price price increases •Capacity utilisation •Market dominance •Ma...
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