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Price PowerPoint Presentation

Price

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Price

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  1. Price The charge the product is sold to the consumer at

  2. Price • The price of a product will affect the sales and the perceptions of the consumer • High price high quality

  3. What factors do business need to consider when setting the price? • Costs of making the product/service • Desired return or profit from the product • Price charged by competitors • “novelty” value or kudos of the product • Any government policies or constraints

  4. Long-Term Pricing Strategies • Low Pricing Strategy • Market Pricing Strategy • High Pricing Strategy

  5. Short-Term Pricing Tactics • These are used by business to gain a competitive edge at various stages in the life of the product.

  6. Short-Term Pricing Tactics • Skimming – high price to begin with • Penetration Pricing – extremely low price set to begin with • Destroyer Pricing – price set very low for a time • Promotional Pricing – prices lowered for a short time • Demand-Oriented Pricing – different prices at different times

  7. Short-term pricing • These tactics may be used at various times during the life of the product. • They provide the business with the opportunity to modify the price element of the marketing mix. • They are regarded as tactical decisions as they have short-term impact.

  8. Short-term pricing tactics may be adopted once the business has identified the long-term strategy. • The short-term tactics complement the long-term strategy.

  9. Make sure you can: • Describe long term pricing strategies • Describe and give examples of short-term pricing tactics • Explain that short term tactics complement long term strategy