Pricing Strategies
Lesson
Exercise
Answer
There are many ways to price a product. Let's have a look at some of them and try to understand the best policy/strategy in various situations. See also eMarketing Price.
Pricing Decisions
What do the following words have in common? Fare, dues, tuition, interest, rent, and fee. The answer is that each of these is a term used to describe what one must pay to acquire benefits from another party.
Pricing Strategies
Pricing is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organisation. The remaining 3p’s are the variable cost for the organisation.
Pricing:
A key point in the successful marketing of a product is the Pricing, i.e. finding the correct price for it. 'Correct' in this context means that selling the product results in maximum profit.
Value Pricing
Definition:Gives your customer more quality for less than they expected to pay.
Example: Used when you want to gain market share, position your product with customers, or obtain market acceptance of a new product.
Definition: A pricing strategy that is based upon what the competition does.
Marketing Glossary
Marketing Terms and Definitions
Word Painting
Wear Out
Word of Mouth Advertising
Vision ...
Pricing Strategy
Discusses the basics of pricing a product or service, including pricing objectives and methods of achieving them.
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pricing
marketing activity concerned with the setting of prices for new products and the adjustment of prices for existing products
pricing strategy ...
Pricing policies and strategies: the overall strategic guidelines for the pricing decision, specifying pricing's role within an integrated marketing mix.
PRICING STRATEGIES
Pricing strategies can be categorized based on several different variables. One variable of interest relates to the consistency of the prices. Some retailers today attempt to follow a strategy of "everyday low pricing.
Odd Pricing A strategy in which retail prices are set at levels below even-dollar values, such as $0.49, $4.98, and $199.
zone pricing
a pricing method in which all customers within a defined zone or region are charged the same price, more distant customers pay a higher price than those closer to the company's dispatch point, also called multiple zone pricing ...
Auction Pricing System: [auc] Using an auction pricing system, sellers are not constrained by having to fix a price without knowing what the market will bare (traditional pricing methodology).
Product Pricing Research:
A look at consumer sensitivity to a range of prices for a particular product.
Product Prototype Tests:
Tests designed to determine how target consumers would react to early editions of new products.
Pricing levels
Pricing presentations (for example, you can test 2-for-1 specials against 50% off) ...
a pricing method in which customers are charged freight costs from a base point; the base-point may be chosen arbitrarily, but the location of one of the company's manufacturing plants is commonly used. Also called Basing-Point Pricing.
A pricing strategy that sets price largely based on the prices of competitors
Growth stage
The stage at which a product's sales rise rapidly and profits reach a peak, before levelling off into maturity.
a pricing method in which the price for a new product is set by comparing the benefits it offers to those of other products in the same category
compatibility ...
Product / Pricing / Promotion
Distribution / Service / Retail
Brand management
Marketing effectiveness
Market research
Marketing strategy
Marketing management
Market dominance ...
Perceived Pricing: A consumer perceives a price as high, low or fair, in relation to the perceived or experienced value of the product.
predatory pricing Reducing prices below fair market value as a competitive weapon to drive weaker competitors out of the market ("fair" being cost plus some reasonable profit margin).
Psychological Pricing
Setting the price of a product based on the wanted public perception for that product.
Contributed by: Cabe Kline
Pub-Set ...
Cost Per Action. A pricing model that only charges advertising on an action being conducted, for eg: a sale or a form being filled in.
CPA
Cost Per Acquisition. Cost to acquire a new customer, for eg: could include your banner advertising costs.
Combination rate A special media pricing arrangement that involves purchasing space or time on more than one vehicle, in a package deal. This is frequently offered where different vehicles share a common owner.
Can iclude details such as pricing, product features, packaging, advertising, merchandising, distribution, and budget.
Market Penetration The percentage of actual customers as compared with the total number selected as the market.
This was the traditional pricing model for online ads. Now search ads are almost always priced on a cost-per-click basis, but Google content-network ads can be priced via CPM rates if the advertiser wishes.
[edit] Cost Per Order (CPO) Pricing based on the number of orders received as a result of your ad placement. Also known as cost-per-transaction. [edit] Cost Per Sale (CPS) Pricing based on the number of sales transactions your ad generates.
Conjoint analysis is a versatile marketing research technique that can provide valuable information for market segmentation, new product development, forecasting and pricing decisions.
In the pricing section, for instance, you will want to justify the prices that you set.
If you're inexperienced in pricing jobs, find a direct mail package (you should be keeping a dm "swipe file") that closely resembles what you plan to mail and take it to two or three printers so they can question you on paper stock, colors, ...
Sites specializing in incentive programs are in a position to offer CPA pricing on various types of leads, although the usual caveats concerning incentivized traffic still apply.
The process marketing financial products and services, including the development of pricing, promotion, and distribution strategies that satisfy the needs of the financial organization and their retail and/or institutional clients.
PPC is a pricing model used for predominantly contextual based text link advertising. In this pricing model, the advertiser only pays for clicks, regardless of how may times an advertisement is shown.
CPC is a pricing model in paid search that is based on the dollar amount paid each time an ad is clicked. Most search and content ads are in an auction system in which advertisers are charged on a maximum Cost Per Click basis.
Is your pricing consistent and fairly communicated? Are your delivery and fulfillment practices dependable and consistent from one order to the next?
CPM is a way of pricing ads where the advertiser pays a fixed cost per thousand subscribers to whom the ad is sent.
A media pricing arrangement that involves purchasing space or time in more than one medium, in a package deal. This is frequently offered where different media vehicles share a common owner. A special media pricing arrangement with the seller.
competition-oriented pricing - A strategy whereby prices are set based on what a firm's competitors are charging competitive advantage. Something unique or special that a firm does or possesses that provides and advantage over its competitors.
Pay-per-sale ; An advertising pricing model in which advertisers pay agencies based on how many consumers actually buy something as a direct result of the promotion. Despised by agencies for the wretched accountability it brings to their lives.
Marketing -- the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, and people to create exchanges that will satisfy individual and organizational goals.
Cost Per Click (CPC): A method of pricing online advertisements. Advertisers pay the publisher an amount based on the number of clicks an ad receives.
Compare to CPC pricing (defined above). CPM is a standard monetization model for offline display ad space, as well as for some context-based networks serving online search ads to, for example, web publishers and sites.
CPA: (Cost Per Action)
Online advertising pricing model, where the advertiser pays for each specified action (a purchase, a form submission, and so on) linked to the advertisement.
Datacard: List information including counts, demographics, pricing, etc.
Debossing: Pressing letters or illustrations into a sheet of paper using a metal or plastic die to create a depressed (debossed) image.
A brand is built through controlling customer expectations and the social interactions between customers. Building a brand is what allows you to move away from commodity based pricing and move toward higher margin value based pricing.
Pay Per Impression (PPI): An advertising pricing model in which advertisers pay based on how many users were served their ads.
Incentive: A reason to take action, which might include discounts, bonuses, free shipping, bundle pricing, etc.
Insertion Order: The contract between a media buyer and the media property selling the advertising.
Marketing mix - The elements of marketing, including product features, pricing, packaging, advertising, merchandising, distribution and marketing budget.
Controversial strategy of deliberately confusing the customer. Examples are alleged to be found in the telecommunications market, where pricing plans can be so complicated that it becomes impossible to make direct comparisons between competing offers ...
Data feeds are converted into individual products and include descriptions, links for images, links for visitors to click, pricing and more.
Product differentiation - Establishing clear distinction between products serving the same market segment. This is typically accomplished through effective positioning, packaging, and pricing strategies.
A large share confers advantages of scale in product development, manufacturing and marketing. It also puts you in a stronger position in the minds of customers, which has a positive influence on pricing.
Normally a prize or reward, incentives can also be discounts, bonuses, free shipping, bundled pricing, etc.
 See also: Market, Marketing, Product, Offer, Customer
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