ipl-logo

Explain The 8 Steps Of Pricing Process

1010 Words5 Pages

8 steps for Pricing Process:
Some of the major steps involved in price determination process are as follows: (i) Market Segmentation (ii) Estimate Demand (iii) The Market Share (iv) The Marketing Mix (v) Estimate of Costs (vi) Pricing Policies (vii) Pricing Strategies (viii) The Price Structure.
(i) Market Segmentation:
In market segments, marketers will have firm decisions on:
-The type of products to be produced or sold.
-The kind of service to be rendered.
-The costs of operations to be estimated.
-The types of customers or market segments sought.
(ii) Estimate Demand:
Marketers will estimate total demand for the product based on sales forecast, channel opinions and degree of competition in the market. Prices of comparable rival products …show more content…

Proper pricing strategy is evolved to reach the expected market share either through skimming price or through penetration price or through a compromise, i.e., fair trading or fair price- to cover cost of goods, operating expenses and normal profit margin.
(iv) The Marketing Mix:
The overall marketing strategy is based on an integrated approach to all the elements of marketing mix. It covers: (a) Product-market strategy (b) Promotion strategy (c) Pricing Strategy (d) Distribution Strategy.
Marketers will have to assign an appropriate role to price as an element of marketing- mix. Promotional strategy will affect pricing decisions.
The design of marketing mix can indicate the role to be played by pricing in relation to promotion and distribution policies. Price is critical strategic element of the marketing mix as it influences the quality perception and enables product or brand positioning. Price is also a good tactical variable. Changes in price can be made much faster than in any other variable of marketing mix. Hence, price has a good tactical …show more content…

This is usually expressed as a percentage of breakeven. Industry norms, experience or market knowledge will help you decide mark-up. If the price looks too high, trim your costs and reduce the price accordingly. Be aware of the limitations of cost-plus pricing, because it works on the assumption you will sell all units. If you don't, your profit is lower.

5- Set a Value-Based Pricing:
You'll have to know your business sector well to set a quality based cost. For instance, the expense to put up a hairdryer for sale to the public may be £10. Yet you may have the capacity to charge clients £25 if this is the business sector esteem.

6- Think about Other Influences on Price:
In what capacity will charging VAT have an effect on cost? Could you keep edges unassuming on a few items with a specific end goal to attain to higher edge deals on others? You may need to compute diverse costs for distinctive regions, markets or deals you make on the web. Offering at odd qualities (for instance, £9.99) instead of entire pounds is basic.

7- Keep on Your

Show More
Related

  • Lululemon Marketing Mix Essay

    1545 Words  | 7 Pages

    There are four major elements that make up the marketing mix: product, price, place, and promotion. A product can be described as everything that makes up a good, service, or idea, including product design, features, colour, packaging, warranty and service levels (Kerin et al., 2015). A price refers to the amount of money that a product will sell for. The place consists of the channels where a product is distributed, as well as the merchandising used to sell the product. And finally, promotion includes all of the ways in which consumers are made aware of a product, such as advertising, public relations, sales promotion, direct response, event marketing and sponsorship, and personal selling (Kerin et al., 2015).

    Read More

  • Hsc300 Unit 4 Business

    965 Words  | 4 Pages

    Pricing

    Read More

  • Year 11 Economics Definitions

    946 Words  | 4 Pages

    Define Demand- The willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period. Quantity Demanded- The number of units of a good purchased at a specific price.

    Read More

  • In Absence Of The Federal Trade Commission

    1616 Words  | 7 Pages

    Therefore, a company must anticipate how much other companies will charge for a similar product to have competitive pricing. This turns into an application of game theory. This happens when two firms (or

    Read More

  • Why Has Loblaw's Strategy Been Successful?

    790 Words  | 4 Pages

    The price of raw materials is high with low consumer switching cost. However, the increasing demand for healthy and organic food is creating openings for smaller competitors to enter and hide from the pricing

    Read More

  • Change Order In Construction

    1870 Words  | 8 Pages

    It also includes the unit price for each item. Where the final price of the project depends on the quantities needed to finish the work. 3- The cost plus contract A contract agreement where the purchaser (the buyer ) pays the full cost of all labor and materials, plus an amount for contractor overhead and profit (which is usually a percentage of the labor and material cost).

    Read More

  • Swot Analysis Of Apple Marketing Strategy

    3863 Words  | 16 Pages

    1.0. INTRODUCTION Every organization strives to benefit from creating value for its customers, in the most effective way, for the purpose of attaining competitive advantage in the business environment in which they operate. Philip Kotler(2015) defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit”. According to Hollensen (2003), a strategy is a fundamental pattern of present and planned objectives…”

    Read More

  • Pricing Strategy And The Pricing Strategy: Dyson

    1009 Words  | 5 Pages

    4.4 Pricing Strategy For a number of reasons, price is one of the most important aspects of an effective marketing strategy (Gerstein & Friedman, 2015). First, price is the only marketing variable that generates revenue. Second, buyers see price as an attribute of value (Tanner & Raymond, n.d.). Consequently, an organization must carefully assess its internal and external environment to choose the most effective pricing objective, which—in turn—will drive a product’s initial pricing strategy.

    Read More

  • Swot Analysis Of Skillshare

    1415 Words  | 6 Pages

    6.0 Marketing Strategies There are different marketing strategies which can be applied for each component depending on organizational objectives or goals. Skillshare need to accomplish the precise equilibrium of the marketing mix to achieve its goals. Figure 1: The 4 Ps of Marketing Mix Marketing mix is an arrangement of four choices which should be taken before propelling any new product or service on the market. These variables are otherwise called the 4 P's of marketing. These four variables help the firm in settling on vital choices essential for the smooth running of any product / organization.

    Read More

  • Price Discrimination In Hotel Industry

    777 Words  | 4 Pages

    In the case of hotels, suppliers create different consumer segments, we can relate to them as lower-end consumers, and higher-end consumers. Obviously, hotels cannot set the price that higher-end consumers are willing to pay, because all lower-end consumers will not be able to afford the good. Inversely, if hotels set the price that lower-end consumers are willing to pay, higher-end consumers gain huge consumer surplus, thus lowering the profit for the suppliers. In order to take the consumer surplus, hotels keep lower prices for some rooms in order to target lower-end consumers and offer some higher quality rooms (for example presidential suits) to target higher-end consumers. The difference in revenues providing different rooms and the same ones is seen below.

    Read More

  • Value Proposition Of Fitbit

    1808 Words  | 8 Pages

    The pricing strategy or pricing policy is one of the most important managers make for a product as it affects the profitable outcome and competitiveness that a product may make. (Toni, 2017). A business can use a variety of pricing strategies when selling a product or service. The price can be set to maximize profitability for each unit sold or from the market overall. It can also be used to defend an existing market from new entrants, to increase market share within a market or to enter a new market by dropping the price or offering more benefits with the device such as packages.

    Read More

  • Unilever: Meso Analysis: Porter's Five Force Model

    764 Words  | 4 Pages

    Some are high number of firms and low switching of costs, both are strongly affected forces on competitive rivalry of Unilever. In such a big market, it’s very easy for a customer to switch to other brand. For that purpose low switching of prices have a very strong effect on their market value. Thus, in the case of Unilever the competitive rivalry is strongly

    Read More

  • Marketing: Marketing Mix In The Ice Cream Industry

    1497 Words  | 6 Pages

    6.1.2 Price Price is the value or amount that customer pays to buy a product. For instance, for our Star Lab ice cream shop, we need to consider the cost of production of our ice cream, price of our main competitor and our potential customers demographics in order to succeed this competitive market. (C. Breidert, 2007, p.9) 6.1.2.1 Pricing Strategy Pricing strategy that can be used by our company such as penetration pricing, cost-plus pricing, value based pricing and more. But we think that market penetration pricing is the best pricing strategy to be used by our business.

    Read More

  • Mcdonald's Market Segmentation Strategy

    1725 Words  | 7 Pages

    INTRODUCTION McDonald's has become an icon of American fast food. It is now internationally known, with thousands of restaurants in various countries around the world. In 1940, Dick and Mac McDonald opened McDonalds’s Bar-B-Q restaurant on Fourteenth and E streets in San Bernardino, California. It was a typical drive-in featuring a large menu and car hop service. After several years in business, Dick and Mac McDonald shut down their restaurant for three months for alteration.

    Read More

  • Marketing Strategy Of Chanel

    1438 Words  | 6 Pages

    Marketing strategies is a thoughtful analysis of a product and the target market to design a series of strategies focusing on the competencies while ensuring to overcome the weaknesses of the product. The core purpose behind devising marketing strategies for any product is to fulfil the marketing objectives or goals set by the organization for the promotion and sales of a product. Chanel is one of a kind brand which every individual is aware of. A high end line of beauty products particularly their perfumes have made the brand spark in the cosmetic industry. The reasons for such high popularity of the product besides the high quality, is the effective marketing of the product.

    Read More

More about Explain The 8 Steps Of Pricing Process

Open Document