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The seller collects the freight -> attract business

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Seller selects a certain city as "base point" + all related shipping costs

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Company set up many areas+ customers of an area pay a single total price.

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One price + freight + all customers

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Goods delivered to the carrier + passes to the customer.

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Customers in different regions

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•Used too frequently

•Create “deal-prone” + customers waiting for promotions

•Creates price wars.

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Lower the consumer’s “total price

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Purchase product + specified time

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Attract customers + certain period

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Low-priced products-> buy other items+ the normal price

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The temporarily priced below the list price

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Buyers refer to prices+ viewing the product:
Noting current prices

Remembering past prices

Assessing the buying situations

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Sellers consider price rather than economics.

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Balances price and demand

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Charge the right customer + the right price at the right time.

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Sell ​​below cost-> eliminate competitors

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Pricing+ no talking to competitors

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•Reduce price+ match competition

•Maintain price+ raise the perceived value

•Improve quality+ increase price

•Launch a lower-price “fighting brand”

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•Product is “hot”

•Company greed

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•New models will be available

•Models are not selling well

•Quality issues

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An increase in selling price:
•Cost inflation

•Increased demand and lack of supply

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A reduction in selling price
•Excess capacity

•Increase market share

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Sold in different regions+ priced differently+ the same cost

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Different versions+ priced differently +difference in cost

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Different customers+ different prices+ same product

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Sell a product at two or more prices :
•Market must be segmentable

•Segments must show different degrees of demand

•Market cannot exceed revenue

•Must be legal

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- Change old stuff to new stuff
- Agents participating in advertising

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•Cash discount for paying promptly

•Quantity discount for buying in large volume

•Functional discount for selling

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Discount for customers: early payment+ product promotion

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Many products at reduced prices

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No value produced as a result of the main product

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• Fixed fee

• Variable usage fee

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Products must be used with the main product

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Optional products+ accessories with main product

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The cost difference between in-line products+ customer reviews+ competitor prices

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Low initial price-> penetrate the market quickly+ deeply to attract buyers
- Price sensitive market

- Inverse  of production+ distribution cost

- Low prices-> keep competition

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High initial prices to “skim” revenue layers:
• Product quality and image -> support the price

• Buyers want the product at the price

• Small volume ->  not cancel the advantage of higher prices

• Competitors -> not enter the market easily.

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Chap 11: Pricing Products: Pricing Strategies

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Chap 11: Pricing Products: Pricing Strategies