1. Pricing
Soma Giri
Disclaimer: - Some of the images and content have been taken from different online sources and this presentation
is intended only for knowledge sharing but not for any profitable reasons

2. What
This is the only element in the marketing mix that brings in the revenues.
All the rest are costs
Price communicates the value positioning of the product.
Price = Cost + Profit

3. Why
A company must set its price in relation to the value delivered and perceived by the
customer
Lower
Higher
perceived
price
value
Company misses potential profits
Lower
Lower price perceived
value
Company fails to harvest potential profits

4. Why
Philip Kotler identified 9 price-quality strategies
High Price Low Price
High Quality High Super
Premium
Value Value
Over Mid Good
Charging Value Value
False
Rip-off Economy
Economy
Low Quality

5. What
• Price Lining – offers merchandise in a given category at certain prices
– Shirts at $25, $35, $50
– Upper tier is better quality premium brand
– Middle tier is for average priced brands
– Lower tier for price-conscious customers.

7. What
Optional Product– setting prices for accessories or options sold with the main product.
Captive Product – sets the price for one product low but compensates for that low
price by pricing the supplies needed to operate that product high.

8. What
Bundle Pricing – several complementary products sold at a single price.
– Travel services
– Computers and software
Geographical Pricing – refers to price adjustments required because of the location of
the customer for delivery of products.

9. Psychological Pricing –
techniques that create an illusion

10. Illusions
Illusions are very interesting
• Odd-Even Pricing
– Odd numbers convey a bargain image -
- $.79, $9.99, $699
– Even numbers convey a quality image
-- $10, $50, $100

11. What
Prestige Pricing – sets a higher than average price to suggest status
Multiple-Unit Pricing – 3 for $.99
Suggests a bargain and helps increase sales volume.
Better than selling the same items at $.33 each.

12. What
Everyday Low Prices (EDLP) – set on a consistent basis

13. What
Promotional Pricing -- Used with sales promotion
• Loss Leader Pricing – offering very popular items for sale at below-cost prices
• Special-Event
– Back-to-school specials
– Dollar days
– Anniversary sales
• Rebates and Coupons