3.adapting the price

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How should a company adapt prices to meet varying circumstances and opportunities?

Companies do not set a single price but rather develop a pricing structure

Structure reflects the variations inGeographical demand and costsMarket-segment requirementsPurchase timingsOrder levelsDelivery frequency Service contracts, etc.

Pricing for rural marketsNo compromise on qualityLesser quantityCoinage pricing

Geographical Pricing4 important price adapting strategies:

Barter, Compensation deal, Buyback arrangement, Offset, Countertrade, etc.

Price discounts and allowances

Discount, Quantity discount, Functional discount, Seasonal discount, Allowance

Risks of discountingDiscounting may become the normUndermining the value perceptions of offeringsSelf-destruction by always being on saleLosing long-run profits

Promotional Pricing

TypesLoss-leader pricingSpecial event pricing (Diwali, Christmas offers)Psychological discountingLonger payment terms (Low EMI autos)Special customer pricing (Platinum Debit Card)Cash rebatesWarranties and service contracts

Differentiated Pricing The three degrees of price discrimination

ElementsCustomer-segment pricingProduct-form pricingImage pricingChannel pricingLocation pricingTime pricingBeware of legal issues!!

Recap-Price adapting strategiesGeographical pricing (Cash, Countertrade)Price discounts and allowancesPromotional pricingDifferentiated pricing

References and CreditsMarketing management Philip Kotlerhttps://www.flickr.com/search/?text=adaptinghttp://digital-photography-school.com/wp-content/uploads/2014/02/paper-and-pen.jpghttps://ncpedwin.files.wordpress.com/2011/03/spry_sachet.jpghttp://www.slb.com/contact_us/~/media/Images/contact/contact_sales_map2_updated.ashx?w=433&h=240&as=1

DisclaimerCreated by Mohith Reddy, IIT Madrasduring an internship by Prof. Sameer Mathur, IIM Lucknow.