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Adopting Price

Adopting Price. Eman Abu Shammala. Meaning of price . Prices were set by negotiation between buyers and sellers. "Bargaining" is still a sport in some areas. Adapting the price . Companies will adapt the price to varying condition in the marketplace

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Adopting Price

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  1. Adopting Price Eman Abu Shammala

  2. Meaning of price • Prices were set by negotiation between buyers and sellers. "Bargaining" is still a sport in some areas

  3. Adapting the price • Companies will adapt the price to varying condition in the marketplace • Geographical pricing is one marketplace adjustment based on a company decision related to pricing distant customers (cash, counter , trade , barter ). • Price discounts and allowances are a second area for adjustment where the company establishes Cash discount

  4. Quantity discounts: the more you buy, the cheaper it becomes – cumulative and non cumulative. • Functional discounts: discount offered by a manufacture to trade-channel member if they will perform certain functions. • Seasonal discount • Allowances: an extra payment designed to gain reseller participation in special programs.

  5. Promotional pricing provides a third marketplace option, with the company deciding on loss-leader pricing, loss leader pricing– to stimulate traffic • Cash rebates – to encourage purchase within a specified time period. • Low-interest financing– to facilitate purchase • Longer payment terms—for lower monthly payments • Warranties and service contracts—added value • Psychological discounting—set an artificially high initial price

  6. Discriminatory pricing, the forth option, enables the company to establish different prices for different customer segment, product forms, brand images, places, and times. • Price discrimination works when: • Market segments show different intensities of demand • Cost of segmenting and policing the market does not exceed extra revenue • Image pricing—same product at two different levels • Channel pricing (location pricing)—same product priced differently at different locations • Time pricing-- same product priced differently at different day, time or season

  7. Product mix pricing, enables the company to determine price zones for several products in a product line, as well as differential pricing for optional features, captive products, byproduct, and product bundels

  8. Thank you

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