Pricing - Appunti della sezione di marketing. Professore:Federico della Bella PDF

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Appunti della sezione di marketing. Professore:Federico della Bella...

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Pricing Pricing is crucial to a business as it defines the business profitability, determines demand, positioning and distinctiveness. The definition of price (not only in monetary cost) is: What drivers affect pricing? - Economic Situation - Product Lifecycle - Cost structure - Competition - Laws

Product

Pricing PPolicy olicy What does it mean to set a pricing policy? It’s establishing criteria and guidelines for the definition of price for a product/service.

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Price

The 6 steps process to set the price 1. Defining pricing objective Companies can have different business objectives that depend on the orientation of the company and the actual situation it’s in.

2. Forecasting demand After the objectives are clarified, the company has to estimate demand and forecast sales under different conditions and price. Here the price elasticity comes into play. Knowing the degree of elasticity for our product is crucial for both initial positioning and further variations in price.

3. Cost estimation We also have to make sure that our product in addition to being price appealable to the customer, also covers the cost of producing it and making a profit. Cost estimations methods such as JOC, ABC, … help us understand the cost structure for the product. 4. Analysis of competitors’ behavior If your product Is distinctive, you can obtain a premium price. 5. Selection of the pricing method

6. Pricing decisions Here we are selecting the actual pricing method and the value of the price itself. Minimum Price Minimum price= direct variable cost Break-Even Price

Markup Price Target Return Price Percieved Value Pricing Skimming pricing  Setting the price high at the beginning to acquire customers with low elasticity and then reduce it to enlarge the customer base.

Pricing TTactics actics Other than the initial pricing policy chosen there could be actions that modify the price in the short term to adapt to market situations. 1) Discount IN the B2B market discounts is usually on quantity. Other kinds of discounts can be: -

Trade discounts (favoring commercial intermediaries) Financial Discounts Seasonal Discounts

2) Promotions Promotions are incentives to manufacturers or retailers that serve to change a brand or product’s perception temporarily. They are short-term oriented and able to modify behaviors. Promotions can be directed to: -

Retailers (PUSH) Customers (PULL)...