An Overview of Marketing

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Lamb, Hair, McDaniel
CHAPTER 20
Setting the Right Price
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How to Set a Price on aProduct or Service
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Setting the Right Price
Establishprice goals
Estimate demand,costs, and profits
Skimming
Status quo
Penetration
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Establish Pricing Goals
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Choose a Price Strategy
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The Legality and Ethics ofPrice Strategy
Unfair Trade Practices
Price Fixing
Price Discrimination
Predatory Pricing
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Price Discrimination
The Robinson-Patman Act of 1936

• There must be price discrimination.
• Transaction must occur in interstate commerce.
• Seller must discriminate by price among two or
  more purchasers.
• Products sold must be commodities or tangible
  goods.
• Products sold must be of like grade and quality.
• There must be significant competitive injury.

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Predatory Pricing
Predatory Pricing
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Tactics for Fine-Tuning the Base Price
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Discounts, Allowances, Rebates, and Value-Based
Pricing
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Value-Based Pricing
Setting the price at a level that seems to the
customer to be a good price compared to the
prices of other options.
Value-BasedPricing
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Geographic Pricing
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Other Pricing Tactics
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Fine-Tuning the Base Price
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Pricing During Inflation and Recession
Delayed-quotation pricing
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Ch 20 Discussion Questions

1. Describe the procedure for setting the right
   price in marketing.
2. Explain the four major legal and ethical concerns
   in pricing decisions.
3. What is pricing tactics? Explain how discounts,
   geographic pricing, and other special pricing
   tactics can be used to fine-tune the base price.
4. Explain how pricing decisions change during
   periods of inflation and recession.