PRESENTATION ON MARKET RESEARCH AND METHODS OF PRICING AND ITS PROCESS

PRESENTED BYN.N.V. Krishna kanth

I MBAALIET

Objective of ppt is to learn the following :

• Definition and meaning of market research• Importance of Marketing Information System• Marketing research process• Methods of pricing and its process

• Definition: According to Philip Kotler, ‘Marketing research is a

systematic problem analysis, model building and fact finding for the purpose of important, decision making and controlling the marketing of goods and services.

• Meaning: Research means a systematic and objective

investigation of a subject or a problem in order to discover relevant information or principles. When applied to solving marketing problems, it is known as marketing research.

6.5

The Marketing Information System

• Assessing information needs:– Objective is to make better marketing decisions– Must consider needs of all users– Balance information wants with needs and

feasibility (and costs) of offering it

• Developing information:– Internal data– Marketing intelligence– Marketing research

Developing Information

• Internal data:– Information collected, stored within the

organization– Internal databases– Source from different departments

• Marketing intelligence:– Systematic collection and

analysis– Publicly available

information– About competitors and

market developments

The Marketing Research Process

• Marketing research:– Systematic design, collection, analysis, and reporting– Data relevant to a specific marketing situation– Facing the organization– Multi-step process– Can be done by company

personnel or contracted to outside companies

• Defining the problem and research objectives:– Exploratory research– Descriptive research– Causal research

• Developing the research plan:– Secondary data– Primary data

• Secondary data sources:• Business data

– CNN– Marketing journals– Trade publications– General business magazines

• Primary data collection:– Observational research– Survey (descriptive) research– Single-source data systems– Experimental research– Focus group interviewing– Online (Internet) marketing

research

• Government data:Industry StrategiesSecurities and Exchange Commission

• Internet data:CyberAtlasInternet Advertising BureauJupiter Media Metrix

Contact Methods

Mail Telephone Personal Online

Flexibility Poor Good Excellent Good

Quantity of data collected Good Fair Excellent Good

Control of interviewer effect Excellent Fair Poor Fair

Control of sample Fair Excellent Fair Poor

Speed of data collection Poor Excellent Good Excellent

Response rate Poor Good Good Good

Cost Good Fair Poor Excellent

What is a Price?

• Price: the amount of money charged for a product or service, or the sum of values exchanged for the benefits of having or using the product or service– Fixed pricing– Dynamic pricing– Only marketing mix

element that produces revenue

• Pricing best practices:– Develop a 1% pricing

mindset– Consistently deliver more

value– Price strategically, not

opportunistically– Know your competition– Make pricing a process

PRICE =

• One of the important ‘P’ in the marketing mix is price. Price may be defined as exchange of goods and services in terms of money.

Quality of money received by the seller

Quality of goods and serices rendered received by they buyer

Internal Factors Affecting Pricing Decisions

• Marketing objectives: – Survival– Current profit

maximization– Market share leadership– Product quality leadership

• Marketing mix strategy: – Price should be consistent

with other mix elements– Target costing– Non-price positions

Costs

• Fixed costs: costs that do not vary with production

• Variable costs: costs that vary directly with the level of production

• Total costs: sum of fixed and variable costs

External Factors Affecting Pricing Decisions

• Types of markets: – Pure competition– Monopolistic competition– Oligopolistic competition– Pure monopoly

• Competition: – Consumers will compare– High margins attract

competition– Benchmarking costs

Types of Pricing Strategy

Penetration

Skimming

Bundling

Value

Multiple

Premium

Leadership

• Market penetration pricing: setting a low price for a new product to attract a large number of buyers and achieve a large market share

• Market skimming pricing: setting a high price to skim maximum revenues layer by layer from the segments willing to pay the high price

• Price Bundling: Organization sells the related products at a single price. It is a kind of packaged deal for the customers. For example: McDonalds offering happy meal as a part of price bundling strategy.

• Multiple pricing: Discounts are provided by the organization to those individuals who buy a larger quantity. For example, if a person buys one piece of shirt, he might get it at 500/- but on buying 3 pieces of shirt, he might get it at 1250/-, there by getting a discount of 250/-.• Value pricing: A customer perceives a product as a group of utilities that can provide him total satisfaction. Therefore, the prices should be fixed according to the customer’s perception. In most of the cases, lower prices are established.• Leadership pricing: This is a style of pricing in which one organization becomes dominant in the matter either because of its operations or by generating customer loyalty. It becomes the leader and sets up the price and the other follows it. This is mainly undertaken in a situation of oligopoly.• Premium pricing: This is a pricing strategy under which different prices are charged for different versions of the same product. For example, the same model of a car has different versions like LXI, VDI, etc., and different prices are charged for all of them.

Selecting the pricing objective

Determinging Demand

Estimating Cost

Analysing Competitors Costs, Price and Offers

Selecting a pricing method

Selecting the final price

PROCESS OF PRICING