pricing in rural market
TRANSCRIPT
Module IV
Pricing
Affordability
Affordability
Income of Customers
Price of the product/Service
Market FragmentationSaturation of marketsInter-category CompetitionCustomizationValue conscious consumption
• Price – Market value of a product or service• Monetary and Non Monetary terms
Concept and Significance
Indicates the market value of a product
Gives an image to the product
Major tool in Marketing in designing offers
Major tool in Marketing in competitive battles
Prices of goods possessed and used by the consumers determine their status
Determine level of demand of the product
Generate sales, revenues and profits for firms
Stay Competitive
Price Decision
Price
Pricing Objectives
Profit Sales
Competition Development
• Profit Maximization• Innovative Product Firms• Limited Period of Protection• Software firms• Traders with perishable goods
• Target Return• Securing maximum sales without sacrificing profitability• Need for liquidity or funds for expansion• Desire to recover the investment early• Mitigating competition• Win-slow instead of make a fast buck• Manufacturing organizations
Profit Objectives1
Challenges
• Growth in absolute sales• Growth in Market share• Depends on two factors
– Growth in Market– Growth in sales of the firm
Sales Objectives2
• Meet or prevent competition• Destroy competition• Price leader “policing” the price• Predatory tactics lead to cut throat
competition
Competition Objectives3
• Expand existing Markets
– Stimulating non users– Encouraging more product use
• Enter into new markets
– Penetration or Skimming?
Development Objectives4
• Systematic approach to pricing• Covers all principal pricing problems• 3 Bases• Cost• Competition• Demand
Pricing Policy
• Cost Plus Mark-up• Marginal Cost or Contribution• Target Return• Pay Back method• Experience Curve
Cost Based Approach1
Competition Based Approach2
Leader Pricing Competitive Pricing
Going rate Pricing Sealed bid Pricing
Demand Based Approach3
Discrimination/ Differential
Perceived Value
Psychological
Value
Rural Pricing
Quality Conscious Value Conscious Price Conscious
Discriminatory
(Product Form, Location and Time)
Perceived value
Psychological
Psychological –Odd Nos
Value Pricing
Skimming vs Penetration
Small Units and Low Pricing
Promotional Pricing
Pricing – Distribution
Based Factory Pricing
Uniform delivered Pricing
Zone Pricing
Base- Point Pricing
Pricing – Promotion Based Cash Rebates
Price-Offs
Low Interest Financing
Longer Payment terms
Warranties and Service Contracts
Loss Leader or Traffic Builder
EDLP
Exchange Price Offer
Membership Cards