Price

1
Price

• The charge the product is sold to the consumer at

2
Price

• The price of a product will affect the sales and
  the perceptions of the consumer
• High price high quality

3
What factors do business need to consider when
setting the price?

• Costs of making the product/service
• Desired return or profit from the product
• Price charged by competitors
• novelty value or kudos of the product
• Any government policies or constraints

4
Long-Term Pricing Strategies

• Low Pricing Strategy
• Market Pricing Strategy
• High Pricing Strategy

5
Short-Term Pricing Tactics

• These are used by business to gain a competitive
  edge at various stages in the life of the product.

6
Short-Term Pricing Tactics

• Skimming high price to begin with
• Penetration Pricing extremely low price set to
  begin with
• Destroyer Pricing price set very low for a time
• Promotional Pricing prices lowered for a short
  time
• Demand-Oriented Pricing different prices at
  different times

7
Short-term pricing

• These tactics may be used at various times during
  the life of the product.
• They provide the business with the opportunity to
  modify the price element of the marketing mix.
• They are regarded as tactical decisions as they
  have short-term impact.

8

• Short-term pricing tactics may be adopted once
  the business has identified the long-term
  strategy.
• The short-term tactics complement the long-term
  strategy.

9
Make sure you can

• Describe long term pricing strategies
• Describe and give examples of short-term pricing
  tactics
• Explain that short term tactics complement long
  term strategy