Summary By: Developing Pricing Strategies and Programs
Summary By: Developing Pricing Strategies and Programs
Summary By: Developing Pricing Strategies and Programs
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SUMMARY by
Chapter 14
Developing Pricing Strategies
and Programs
Traditionally, price has been the major determinant of a buyers’ choice. And this is still the
case with large segments of markets across the world. Although non-price factors have
recently risen in importance, pricing remains an important factor in determining sales and
profitability. Also, price is the only component in the marketing mix that provides revenue and
Pricing not costs.
Environment:
Buyers can :
Many firms are • Get instant price comparisons from thousands of vendors: Websites like
nowadays following pricescan.com offer data about products like prices and reviews from hundreds of
the low-price trend merchants.
and have seen success • Name their prices: The consumer can state his desired price for a product and find the
seller willing to meet this price on sites like priceline.com. Also, volume-aggregating
in converting the
sites collate orders from many customers and press the supplier for a deeper discount.
acquired customers to • Get products free: The open source software movement has eroded margins for
more expensive almost any major software player. Also, the recent emergence of low-cost airlines
products by providing tickets only for the amount of taxes levied on a ticket is an example how
combining unique firms have been successful with free offerings.
product formulations
and engaging Sellers can :
marketing campaigns. • Monitor customer behaviour and customize offers: Firms use software to analyse
pricing requests with pricing factors such as past sales data, discounts, etc. to reduce
processing time of these requests greatly.
• Offer certain customers special prices: Certain customers are offered lower prices by
firms in order to capture a certain market segment on ensure the loyalty of existing
customers further.