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Pricing Strategies

Learn about pricing strategies based on consumer perceptions, elements of value, factors influencing pricing decisions, pricing objectives, approaches, and user segmentation. Understand the impact of market demand, lead time, and competition on pricing decisions for maximized profit generation.

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Pricing Strategies

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Presentation Transcript

  1. Pricing Strategies Chapter 9

  2. Pricing Strategies • Price = Value • High price = high quality • Low price = low quality

  3. Elements of Value • Convenience • Aesthetics • Cleanliness • Comfort • Safety & security • Availability • Durability

  4. Value is determined by consumers’ perceptions. • Marketers must price the product according to consumers’ perceptions.

  5. Factors in Pricing • The product elements: • Hard or soft goods (equipment/facilities vs. apparel) • Tickets • Memberships • Information (programs, magazines, internet) • Signage

  6. Price is Most Manipulated Itemin the Marketing Mix • Easily changed • Most visible • Most effective • Most impact on consumers’ perceptions

  7. Pricing Objectives • Efficient use of resources • Fairness to consumers • Maximize participation • Positive consumer attitudes • Maximize product exposure • Generate profit

  8. Approaches to Pricing • Costs of production • Market conditions (supply and demand) • Competitors’ prices • Organizational objectives • Product frequency (MLB vs. NFL)

  9. Four C’s in Pricing (Brenda Pitts) • Consumers • Competitors • Company (costs of production) • Climate (economic conditions)

  10. Factors in Pricing • Market Demand – how sensitive is market to price changes • Elastic - a percentage change in price results in a greater percentage change in quantity sold • Inelastic – a percentage change in price results in a smaller percentage change in quantity sold

  11. Lead time required for purchase • Lower ticket prices (MLB vs. NFL) • Ease of purchase (toll free numbers; internet) • Game day advertising

  12. User segmentation • Corporate suite patrons • Season tickets • Group tickets • Single game tickets Note: Each react differently to price changes

  13. Time and place • Prime time Vs. non-prime time • Courtside vs. balcony seats

  14. Responding to competitors • Raising & lowering prices • Raising and lowering actual or perceived quality

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