dk2424
DK 2424
Questions involved in pricing strategies
# How much to charge for a product or service? This question is a typical starting point for discussions about pricing, however, a better question for a vendor to ask is - How much do customers value the products, services, and other intangibles that the vendor provides.
# What are the pricing objectives?
# Do we use profit maximization pricing?
# How to set the price?: (cost-plus pricing, demand based or value-based pricing, rate of return pricing, or competitor indexing)
# Should there be a single price or multiple pricing?
# Should prices change in various geographical areas, referred to as zone pricing?
# Should there be quantity discounts?
# What prices are competitors charging?
# Do you use a price skimming strategy or a penetration pricing strategy?
# What image do you want the price to convey?
# Do you use psychological pricing?
# How important are customer price sensitivity and elasticity issues?
# Can real-time pricing be used?
# Is price discrimination or yield management appropriate?
# Are there legal restrictions on retail price maintenance, price collusion, or price discrimination?
# Do price points already exist for the product category?
# How flexible can we be in pricing? : The more competitive the industry, the less flexibility we have.
# The price floor is determined by production factors like costs (often only variable costs are taken into account), economies of scale, marginal cost, and degree of operating leverage
# The price ceiling is determined by demand factors like price elasticity and price points
# Are there transfer pricing considerations?
# What is the chance of getting involved in a price war?
# How visible should the price be? - Should the price be neutral? (ie.: not an important differentiating factor), should it be highly visible? (to help promote a low priced economy product, or to reinforce the prestige image of a quality product), or should it be hidden? (so as to allow marketers to generate interest in the product unhindered by price considerations).
# Are there joint product pricing considerations?
# What are the non-price costs of purchasing the product? (eg.: travel time to the store, wait time in the store, dissagreeable elements associated with the product purchase - dentist -> pain, fishmarket -> smells)
# What sort of payments should be accepted? (cash, cheque, credit card, barter)
by dk2424 http://www.managementparadise.com/forums/images/smilies/SugarwareZ-191.gif
:SugarwareZ-191:
# How much to charge for a product or service? This question is a typical starting point for discussions about pricing, however, a better question for a vendor to ask is - How much do customers value the products, services, and other intangibles that the vendor provides.
# What are the pricing objectives?
# Do we use profit maximization pricing?
# How to set the price?: (cost-plus pricing, demand based or value-based pricing, rate of return pricing, or competitor indexing)
# Should there be a single price or multiple pricing?
# Should prices change in various geographical areas, referred to as zone pricing?
# Should there be quantity discounts?
# What prices are competitors charging?
# Do you use a price skimming strategy or a penetration pricing strategy?
# What image do you want the price to convey?
# Do you use psychological pricing?
# How important are customer price sensitivity and elasticity issues?
# Can real-time pricing be used?
# Is price discrimination or yield management appropriate?
# Are there legal restrictions on retail price maintenance, price collusion, or price discrimination?
# Do price points already exist for the product category?
# How flexible can we be in pricing? : The more competitive the industry, the less flexibility we have.
# The price floor is determined by production factors like costs (often only variable costs are taken into account), economies of scale, marginal cost, and degree of operating leverage
# The price ceiling is determined by demand factors like price elasticity and price points
# Are there transfer pricing considerations?
# What is the chance of getting involved in a price war?
# How visible should the price be? - Should the price be neutral? (ie.: not an important differentiating factor), should it be highly visible? (to help promote a low priced economy product, or to reinforce the prestige image of a quality product), or should it be hidden? (so as to allow marketers to generate interest in the product unhindered by price considerations).
# Are there joint product pricing considerations?
# What are the non-price costs of purchasing the product? (eg.: travel time to the store, wait time in the store, dissagreeable elements associated with the product purchase - dentist -> pain, fishmarket -> smells)
# What sort of payments should be accepted? (cash, cheque, credit card, barter)
by dk2424 http://www.managementparadise.com/forums/images/smilies/SugarwareZ-191.gif
:SugarwareZ-191:
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