for MBA trainees pursuing MBA

1. Pricing of Services Services are defined as tangible or intangible offerings to customer Services Pricing Means who pays what to whom either in Monetary or non monetary way Er. Sood

2. Tangibility / Intangibility Spectrum Er. Sood

3. Offerings : May be associated with price or price less. e.g. Internet Music Services What We use & How much it Cost. Er. Sood Name of provider Monthly Cost + & -ve Points Pressplay $ 10 to 25 Premium service // Download expires if Subscription Lapses Realone $ 10 to 20 Enhanced Radio Option// Download Expires if Sub Lapses FullAudio $ 5 to 15 Off beat Music Library // Download Expires if Sub Lapses Fasttrack, Kazza, Morpheus, Apunkabollywood Free of Cost Unlimited download ,huge selection // artist don’t paid.

5. Now Question Arises. ! ! What role does the price play in consumer decision about services? ! ! How important is the price to potential buyers compared with other factors and services features? Answer: services companies must understand how pricing works, but first they must understand how customer perceive prices & prices change 1. Customer Knowledge of service prices. To what extent do customer use price as a criterion in selecting services? How much do consumers know about cost of services? Let’s see one example Er. Sood

6. What do the following services cost in your home town? Automobile service ____________? May be 100 Rs to Lakh Rs Doctor checkup ____________? In Chd. From 150 to 500 Rs. Pizza hut service ____________? Free after 30 or 45 mins. Paid if in time. Saloon Charges ____________? Minimum 50 to 70 Rs per visit. etc etc Were you able to fill prices accurately, if yes then it was on the basis of Ref. Prices . Reference prices : is the price point in memory for a good or service and can consists the price last paid, the price most frequently paid. Er. Sood

9. Pricing Objectives Er. Sood

11. Cost-Based Pricing Techniques Er. Sood

12. Cost-Plus Pricing Prices are set by adding a pre-determined profit to costs. It is the simplest form of cost-based pricing. Markup Pricing A firm sets prices by computing the per-unit costs of producing (buying) goods and/or services and then determining the markup percentages needed to cover selling costs and profit. It is most commonly used by wholesalers and retailers. Price = Product cost (100 – Markup percent)/100 Some firms use a variable markup policy, whereby separate categories of goods and services receive different percentage markups. Er. Sood

14. Value-based pricing Strategy The whole system of business is run by values. values to customers defined in 4 segments Er. Sood

17. Er. Sood