Pricing' can be Tricky

Setting prices for products can be tough

Ifthe firm set prices too high it will miss out on valuable sales.

Ifthe firm sets them too low, it will miss out on valuable revenue.
 What is Price?

"Price is the amount of money chargedfor a product or service, or the sum

of all the values that customers exchange for the benefits of having or
using the product or service.

Price can be defied narrowly as

o Price is the amount of money, paid by a buyer in consideration of
the purchases of a product.
o
O the amount charged for a product or service
Price is the most important factor that effects the revenue and profit of
a firm.
Price is only element in the marketing mix that produces sales revenue.
 Pricing Analysis

Simply put, a pricing analysis is a research process to determine the ideal

pricing for your product.

It's all about finding the "SWEETSPOT"a price that your consumers are
willing to pay and
Price isn't so low that it paints the picture of poor quality,
Price isn'tso high that your target consumers can't afford it or aren't
willing to pay for it.
 What are Pricing Analytics?

Pricing analytics are the metrics and associated tools used to understand how
pricing activitiesaffect the overall business, analyze the profitabilityof specific
price points, and optimize a business's pricing strategy for maximum revenue.

Price analytics enables companies, across all industries to dramatically improve

profitability& &
market share by defining optimal prices pricing strategy

Pricing Solutions leverages data to understand what drives your customer's

buying decisions and integrates this knowledge to meet pricing needs.
.There have been instances where even a 1% increase in price increases the
profitability of an organization by over 10%, and hence pricing analytics is a
critical component of market research.
 Price Analytics

PA are the tools and techniques which are used to know about the way
influence the
pricing activities complete business operations,
PA helps in analyzing the profits and losses of a product at a particular
price point.
PA optimize the trade-off between Price, Volume and Profit.
PA helps in optimizing price strategy for maximum revenue.
PA uses predictive models to enable smart decision-making regarding
pricing strategies, thereby increasing profitability.

PA gives the right information to plan business resources and make

business with the allocated
promotions budget.
PA research process of converting structured and unstructured data into
insights can allow brands to reduce acquisition costs, cultivate
referenceable customers.
 Benefits of Price Analytics- How does it help business?

1.Earn high revenues

2.Planning for promotions

3.Increase business efficiency
4.Customerinsights
5.Value-based pricing

6.Price win
7.Profitable channels

8.Pricing models
9.Plan for price changes
10. Price Optimization

Price Analytics facitates companies in gertingthe price for the product and increasingthe protts for the business.

It also enables in increasing the market share and implementing the pricing strategies.

Priceanaiysis tells about the customer behavior as to what makes the customer buy the product, the knowledge of thecustomer will
enable them to fiax the right price for the product.
Overall it will increase the business and achieve success in the long run.
1.Earn high revenues
Using price analytics techniques facilitates, companies can earn extrarevenue. The profit margin can be created more than a short period of
time. Thiscan be done by fixing price misafignments or price leakages.With price analytics business enterprises can aptiy find price strategies
In the short-run,the company can earn extra income in a short period of time. The realignment of prices and removing the hindrances can
Increase the profits for the business.

2.Planning forpromotions
For a business concern making planning and strategizing pricing, achieving the business goalsis very important for the business. With price

analytics, businesses can closely monitor the market and estimate price changes based on these promotions. it helps in achievingthe feasible
pricing strategies which will yield in getting high returns. Price analytics provides informationto businesses to make business promotions in the
predefined budget limits.

3.Increase business efficiency

Price analytics heips in understanding the method of price negotiation. This will be useful for companies to deal with the price with their
logistic partners and resellers. The data provided by the analytics assists in identifying the suitable price and quotations,this will help in

maximizing the return on investment and profits for the company. Pricing challengeson contract pricing, sale price, capacity curve pricing, and
other pricing problems are resolved by the analytics thereby increasing business efficiency.

4.Customer insights
If the price of the product not according to the customer wil then the company should look into the price changes. Targeting the wrong
is

customer with indifferent prices may resuit in heavy losses for the company. Companies try with improving their prices to target customers
through customer segmentation. Price analytics heips in achievingcustomer segmentation and increasebusiness profitability. If the campany
gets the insights of the customers price analytics and price alignments,can increasebusiness revenue, this keeps the business happy and the
customers.

5.Value-based pricing
Companies use many different and data to set the right price for the product sothatcustomers can buy the product. The right
strategies
for the success of business. Price can createvalue-based pricing where the customers are more
pricing strategyis very important analytics
to buy the product. This createsa solutiontothe business probiem of pricing a product or
willing service. A fair and reasonable price can be
a
created forcustomeTS whichinturncreates valueforthe oroduct
6.Price WIH
Every company has thechallenge of pricing the right product at a right price. Sometimespricing strategies may not work well
for the company, a product may be highly-priced or a product may below priced or products may have price leaks or
underpricing
a product may also happen. This would result in a loss of selling opportunities. Price analytics uses the data in
fora short period of ime
finding out the low hanging fruit which can be fixed easily. It would help in creating high revenue
this would create a win over price.

7.Profitable channels
Creating good leads for business isvery important forsuccess and survival of business. In an online business, leads can be
created through content writing or YouTube videos. Price analytics can help in analyzing which is more profitable according to
the business. Some businesses may provide additional benefits on their products or services under a premium subscription
and customers may or may not prefer premium. Here Price analytics provides a solution for choosing the best channels of
business operations.

8.Pricing Models
To meet the different segments of customers, companies create price models. According to the needs of customers,pricing
tiersare created and offered. Price analytics helps in creating price models. These pricing models are created and offered faor

subscriptionto the customers. The subscriptions are created such as monthly, yearly, or quarterly depending on the
CUstomer's demand.

9.Plan for price changes

Price change is the need of the business and it is done through price strategy. The change in price will affect the demand for
the product. Sales can be expected to increase or decrease. Effectiveprice analytics can help in changing the price of the
products. Predictive models are capable of predicting the future based on past data. The price analytics diagnostics can
examine the present and future trends and plan for the price changes.

10. Price optimization

Customers are sensitive to pricechanges. Any change in the price will have an instant effect on the demand and supply. Price
analytics provides data and analysis to adjustthe prices of the product. This price adjustment will maximize the profits of the
business. Price optimization is a revenue management method that increases the profits of the business.
 Profit Margin Vs Markup

Cost 400
Profit 200

Price 600

Profit 200
Profir Margin 0.33
price 600

Cost Price x1 ProfitMargin) 200"(1-0.333), 200"66-400

Profit 200
Mark Up 0.50
Cost 400

Price Costx(1 Markup)400 (1-05),40015 600

Mark up
Cost Price

-ProfitMargin
 EBIT&EBITDA

Revenue 1,00,00,00o Level playing fieldto compare companies on operational level, which is

best company to do its job

COGS 20,00,000 intensive industries (manufacturing, Oil & Gas,Telecom
EBITDA-Capital
etc
Marketing & Sales () 15,00,000
EBITDA Net Profit +Interest+ Tax +Depreciation+Amortization
office & Admin (- 10,00,000

industries. It reflects Operating profit like Technology,

EBITDA 55,00,000 EBITService
Consulting etc
Depreciation 5,00,000 EBIT Net Profit +Iinterest+ Tax
Amotization
Assets-Depreciation on Fixed assets
EBIT 50,00,000
Liabilities Interest on Debt & Equity
Interest 1,00,000

Non Operational Expenses

PBT 49,00,000
Interest-Financial structure
Tax 30% 14,70,000 Taxes-Tax levied by govt, depend on geography.&duct
Net Profft 34,30,000 Depreciation & Amortization:- Past Investment, Enses
 Important Pricing Matrics
There are multipletypes of pricing
analytics and models that brands and researcherscan look at. But some of the most
Commonly used pricing analyticstypes are listed below with examples.
Pricing sensitivity or willingnessto pay (WTP)

One ofthe most common pricing analyticstypes is the price sensitivity meter or the willingness to
pay (WTP)
guotient ofCustomers. Iin this pype you can very quicklý
gauge what a customer is willing to pay and the features
they are willing to pay for, tradeoffson features., etc.

wWithout thispricing analyticstype,itis nearlyimpossible to understand your product'sor service's perceived value,
competitive benchmarking, and more.

market for a clothing range running survey research to understand how much customers would pay fora certain
clothing line, the value that they perceive, and how competitors currentlyprice clothing in a similar bracket.

Feature value analysis ar Relative preference analysis

Feature valueanalysisor tradeoffanalysisis another critical component of pricing analytics. Research shows what
KCustomers are willing to pay
and the price they are willing to pay. This model also monitors the
for
importanceof features to customers based on what is a must-have, sound, and featuresthey could do
mple works it measures which features aremore or less important to customers relative to other
re value is when an appliance manufacturer is launching a new product; there
analysis
Sis to look at what features manage most to customers, what featuresset them
tit within the brand ethos, what features are gimmicks.
Average revenue per user (ARPU
The average revenue per user (ARPU) is the net value of the revenue generated from each user for a pre-defined period.
ARPU is calculated by dividing the total marginal revenue by the number of users. The higher ARPU, the better chance
that the company is able to extract more cash in the future. ARPU also reveals the relative value of the product.
ARPU allows organizations to calculate if their pricing model suits their market, competitive benchmarking, value analysis,

and more.
An example of this pricing model a
phone manufacturer that launches muitiple phone variants a year
is across different
features and price points. Higher the ARPU, the higher the profitability of the brand.

Custamerlifetime value (CLV) and customer acquisition cost(CAC

Customer lifetime value (CLV) and customer acquisition cost (CAC) are important metrics in pricing analytics research

(LTV:CAC) ratio measures the relationship between the Lifetime value of a customer, and the cost of acquiring that
customer. The matrix is computed by dividing LTV by CAC. It is a signal of customer profitability and of the sales and
marketing efficiency. what is required to keep them as customers for your brand for long, so they continue to spend with

ur brand.
example of this pricing analytics to be measured is a brand spending "x
on acquiring a new customer. Still, the
stomer's lifetime value is "10x" making it a profitable and successful business proposition for the brand
 Steps in Setting a Price Policy

Selecting the Pricing Objectively

Determining Demand
Estimating Costs
Analyzing competitor's Costs, Prices and Offers

Selecting a Pricing Method

Selecting the Final Price
 Steps in Setting a Price Policy

Pricing Objective Product-

Survival Profit Volume
Quality
The Company first has to decides
Choose the Use
Covers pricing to| High prices to
its market positioning/ offering. variable & price that increase sales COver
some fixed creates volume performance
COst maximum quality, R&D,
Survival profit branding

Keeps prices Set a target maintainor Develop and

Profit Maximisation /Achieve low to stay in
retun or mark- increase maintain an
targeted return business up market share image of
quality and
Capture/Maximise Market Share
exclusivity

Product-Quality leadership often for start High obstacle High tech or

ups for Premiumn

competitors products
 Steps in Setting a Price Policy

Determining Demand
Each price leads to different level of demand and have a different
impact on a company's marketing objectives.
Normally there is inverse relationship between price and demand
in a Demand Curve. higher the price, lower the demand.
Most companies attempt to measure their demand curves using
several different methods like survey, statistical analysis, etc.
 Steps in Setting a Price Policy

Estimating Costs

For determination the price of product company should estimate

the cost of product

Variable cost

Fixed cost

Activity based costing

 Steps in Setting a Price Policy

Analyzing competitor's Costs, Prices and Offers

The Firm should benchmark its price against competitors, learn

about the quality of competitors offering, & learn about
competitor's costs.
 Steps in Setting a Price Policy

Selecting a Pricing Method

Various pricing methods are available to give various alternatives

for pricing such as,

Demand-Customer based pricing

Product- Cost based pricing

Competition based pricing

Market based pricing

Other Pricing strategies
 Estimating Demand

Demand Curve describes how many units ofthe product the market demands
for every possible price points.

Pa ---P'2
P -P

Quantity dermanded per period

 Forms of Demand Curves - Linear
Price elasticity properties tell us which curve is appropriate

Linear Demand Curve

Demand follows a straight line relationship between price and demand.
Product's price elasticity changes as price changes.

D-a-bp

D: unit of product demanded by customers

p: Price charged for per unit
A and b: adjust curve to fit product's price elasticity (auto calculated by
excel)
 Price Elasticity

Price Elasticity of Demand

in price
is a measure of the sensitivity
of demand to change
Price Elasticity
of product's price elasticity
Good pricing decision require understanding

a small change in
Inelastic demand is when
demand hardly changes with

price
Coffee-.25 inelastic, Legal fees- 4 inelastic
Eg. Salt-0.1 veryinelastic,

a small in price
Elastic demand is when demand changes greatly with change

Restaurant meals- 2.3 elastic, TV sets- 1.2 Slightly elastic

very elastic,
Eg Foreign travel-4.0
 Price Elasticity of Demand

P
Pa -P
--P

Q,0, o',
Quantity demanded per period Ouantity demanded per period
A. Inelastic demand B. Elastic demand
 Forms of Demand Curves Power

Power demand curve:

Arc that shows relationship between price and demand, when product's
price elastic isn't effected by product price.
Product's price elasticity remains constant as price changes.

D-apb

D: unit of product demanded by customers

p: Price charged for per unit

A and b: adjust curve to fit product's price elasticity (auto calculated by
excel)
 Price Elasticity of Demand

Elastic Unit Elastic Inelastic

Elasticity >1 Elasticity=1 Elasticity <1

(large in absolute value) (small in absolute value)

9% change in quantity % change in quantity

Price Elasticity % change in quantity is
demanded is greater than demanded is equal to that in
smaller than that in price
that in price price

Price increases, revenue Price increases, revenue

decreases and vice versa increases and vice versa

Quantity demanded is mildly

Quantity demanded is not
Price Sensitivity to highly sensitive to the
very sensitive to the price
price

Change when priceincreases Revenue Decreases Revenue remain unchanged Revenue Increases
 What are Pricing Strategies'?

A pricing strategy is a model or method used to

establish the best price for a product or services.

It choose prices to maximize profits

helps the firm
and shareholder value while considering consumer
and market demand.
 Why different Pricing Strategies are needed?
Pricing Strategies take into account many of the business factors,

Revenue Goals
Marketing objectives
Awareness, Max Market Share,Competition
Target Market
Social class (low/medium/high)
Brand positioning and product attributes.
Features/ Technology
Externalfactors
Consumer demand, Competitor pricing, Overall market and Economic trends
 Factors Affecting Pricing

Internal Factors External Factors

Organisational Factor Competition
Marketing Mix Product Demand
Product Cost Economic Condition
Product Life Cycle Government Control
Pricing Objective
Channel of Distribution
 Factors to Consider when setting price

Competition and other

Consumer
Product external factors
perceptions
costs
of value
Competitors' strategies and prices
Marketing strategy, objectives,
Price floor and mix Price ceiling
No profits below Nature of the market and demand
No demand above
this price this price

SS
Price
 Major Pricing Strategies

Demavd Customer based pricing Other Pricing strategies

1) Value- based Pricing
1) Market Skimming Pricing
2) Good-Value pricing
2) Market Penetration /Limit Pricing
3) Value-added pricing
3) Everyday low pricing (EDLP)
4) Bundle Pricing

Product Cost basd pricing 5) Dynamic Pricing

1 Markup/ Cost piuspricing 6) Psychological Pricing
2) Break-Even pricing (No Profit No Loss)
7) Project Based Pricing
3) Target- Return(profit)/ ROl pricing
8) Freemium Pricing

9) Administered Pricing

Compettion based pricing 10) Differential Pricing

1) Going Rate Pricing/ Parity Pricing 11) Discount Pricing

2) Auction type / Competitive bidding
12) Markdown or Clearance pricing

13) Promotional Pricing

Market based pricin
14) Internet Pricing
1) Geographic Pricing
 Factors to Consider when setting price

Demand/Consumer Based
Consumer Percepition of Value
which customer are willing to pay for particular product or services based on their perception
a
Value
about the product
Understanding how much value consumer place on the benefits they receive from the product and
setting a price that captures that value.
Marketer does not design a product and marketing plan then set the price. Price is considered alonmg
with other marketing mix variables before market program is set.
Consumer perception about Product performance, Quality, Warranty & Customer support, etc
1) Value-based pricing uses thebuyersperceptions ofvalue notthe sellers cost,asthe key to pricing. Price is considered before the
marketing program is set.Value-based pricing is customer drien.

2) Good-Value pricing is ofering just the right combination af quality and good service atafair price.

3 Valueadded pricingattachesvalue-edded featuresand servicesto differentiate offers, support higher prices, and built pricing power

Determine Deliver a
Evaluate Set target price
costs and product that
Custome to refliect
meet and
needs & value Customer value
competitive
differentiation exceed value
 Factors to Consider when setting price
Cost Based

Product Cost Based

Set prices based on the costs for producing (fixed & variable cost),distributing
and selling the product plus a fair rate of return for the effort and risks

Convince byers
Design a good Determine Set price based
of product's
product product costs on cost
value

1) Cost-plus pricing /Markup

2) Break-Even pricing (NoProfit No Loss)

3) Target- Return(profit)/ ROI pricing
 Factors to Consider when setting price
Cost Based
Cost-pluspricing/ Markup

A standard markup to the cost of the product.

The profit margin is presented as a percentage of expected return on sales.
Benefits
Sellers are certain about costs

Price competition is minimized

is fair
Buyers feel it

Disadvantages
gnores demand and competitor prices.

Formula:- Mark-up pricing =Total Unit Cost/ (1-Expected Return on Sales)

Eg1. Total Unit Cost Rs1,000 & Expected Return on sale is 20%

Mark up Price = 1000/ (1- 0.20) 1250

Eg2. Total Cost is

Rs25, Expected profft is
Rs25 on sale. i.e Markup of 100%
 Factors to Consider when setting price
Cost Based
Break-even pricing

Price at which total costs are equal to total revenue and there is no profit.

No Profit No Loss

Formula:-Break Even =Total fixed Cost/Contribution

Eg. Sale Price-500, Variable cost-300& Fixed cost -2,00,000
Break Even imit 2,00,000 /200 1000 units
i.e business should sell 1000 units or Sale Price above Rs 500 to earn profit

Formula -Break Even = (Total fixed Cost/ Production units) +Variable cost
Eg. Fixed cost-Rs.50,000, Variable cost 10/unit & Sales Plan 10,000 units
Break Even Limit = (50,000/10,000)+10 15/-

i.e business should sell 10,000 units or 5ale Price above Rs 15 to earn profit
 Factors to Consider when setting price
Cost Based
Target Return (profit)/ROIPricing

Price is set up by taking into consideration Target return on investment.

Formule:- Price =Total Cost + Desired Return on Investment/ Total Sales (units)
Desired Return Total Investment Desied % RO
Eg. Total Cost -10,000, Total Inv-5,00,000; Desired ROI%-20% & Total Sale units -500

Price 10,000+(20% *5,00,000)/500

Rs40 10,000 10,00o/500 Rs40
 Factors to Consider when setting price
Market/ Competition Based
Competition based pricing
Competition- based pricing strategy used competitors' price as a benchmark. Setting
pricing based on competitors strategies, cost, prices, and market offerings.

It doesn't take into account cost of their product or consumer demand.

Business compete ina highly saturated space may choose this pricing.

1) Going Rate Pricing/ Parity Pricing:

Firm bases it price largely on competitor's price

2) Auction type / Competitive bidding:- Supplier bid specific product price

English Auction(ascending bids) one seller many buyers
Dutch Auction(Descending bids)One seller many buyers or one buyer many sellers

Sealed bid Price only one bid to buyer, confidential

 Factors to Consider when setting price
Market Based
Market based pricing
Market based pricing is when products or services are priced differently depending
on geographical location or market.

Geographic Pricing
This be
the customer from another country is making a purchase or if there
if
strategy may used
are in factors the economy or wages. Differences in prices in offline/online market
disparities like
can also be taken as examples

Different prices are charged in different

geographic location or markets for the same product or
service. eg. Price of bread is more in hilly areas.
 Factors to Consider when setting price
Other Pricing Method

1) Market Skimming Pricing

2 Market Penetration/Limit Pricing

Bundle
3) Pricing

4) Dynamic Pricing

5) Psychological Pricing

6)
6) Project Based Pricing

7) Freemium PricingB

8) Administered Pricing
9) Differential Pricing

10) Discount Pricing

11) Internet Pricing
 Factors to Consider when setting price
Other Pricing Method
arket Skiaming.Piclng
A high introductory price is a new premium & innovative product.
charged for

The price islowered down with passage of time because the product become less popular and better
substitutes are available.
Market has few competitors
Product features are unique and highty distinct
Demand should be inelastic. Skimming pricing help to recover sunk cost

eg. Apple & Telecommunication service products.

Morket Penetretion /Limit Pricing

Penetration pricing is just opposite to skimming pricing

A loww introductory price is charged to capture large market share, In longer run the prices are gradualy
increased.

This strategy is based on disruption and temporary loss to gain good market share or retain the monopoly in the
market & discourage the entry of competitors by presenting business as unattractive and non protitable.
Close substitute are available in the market.
Oemand should be highty Elastic. This strategy is suitable for short term and is not sustainabie.

eg. Reliance lio

 Factors to Consider when setting price
Other Pricing Method

Everyday law pricing (EDLP)

Setting prices lower than competitors and then not having any special sales

Consistent sales

Require high volume sales for profitability

Economies of Large scale production. Not suitable for small setup
Co-relation between Market Skimming Pricing & Market Penetration

Psychological Pricing

Pricing method influences consumer emotions& cost perception by intentionally charging differently
than usual.

Psychological pricing targets human psychology to boost sales. This is known as "9-digit effect"

eg. Bata Charging Rs99 instead of Rs100. Offer "Buy 1& Get 1 Free"
 Factors to Consider when setting price
Other Pricing Method
Dynamic Pricing
Dynamic pricing is known as surge, peak load, demand or time based pricing.
also

Pricing is flexible where prices fluctuate based on market and customer demand of the

products. During peak season/time prices are charged high.

The purpose of this pricing is to regulatethe demand by applyingalgorithms that
Consider competitor pricing, demand and other factors. eg. Utilities companies like
Ola/Uber, Airlines/ Train ticket &
Hotels.

Diferential Pricing
Differential pricing is the strategy of selling the same product to different customers at
different prices.

Itenables companies to profitfrom their customer's unique valuations by offering

different customers different price for the same product.

eg. Movie ticket for same movie with different seating zone,
 Factors to Consider when setting price
Other Pricing Method

Bundle Pricing
Firm offers to sell combination of multiple complementary products or services
together for a single price.
The firm may choose to sell bundled products or services only as part of a
bundle. Or sell them as both components of bundles and individuals products

Bundle product as a single product is offered at a lower price than if they were
purchased separately.

1)Pure Bundling
-Individual product outside bundle is not available

2)Mixed bundling - Individual product outside bundle are available at special

price. eg. Value Meals
 Factors to Consider when setting price
Other Pricing Method
Project based Pricing
A project-based pricing strategy charges a flat fee per project instead of a direct
exchange of money for time.
Project-based pricing may be estimated based on the value of the project deliverables.
This pricing may also charge flat fee from the project based on estimated time.

used by consultants,freelancers, contractors or other individuals or laborers who

It is

provide business services.

Internet Pricing
Combination two for more products together and selling as a single product.
-
1)Priority pricing Quality of service eg. Special price for high mbps
2)Flat rate pricing-Fixed rate for availing internetservicesfor a period.

3)User sensitivepricing-Different services are charged separately like

installation/service and usage.
 Factors to Consider when setting price
Other Pricing Method

Administered Pricing
Administered price is one which is fixed by the government and not allowed to
be determined by free market forces like demand and supply
There prices are fixed and legally enforced by government
Regulatory in nature &
Meant for corrective measures.

Objectives
Protect interests of weaker sections of society

Discourage consumption of certain commodities eg. Petroleum products

Encourage consumption of certain commodities eg. Fair price shops
Regular price,
The price atwhich similar goods or services are regularly sold on the
market,

Sale price,
Sale price is a reduced cost that is only available for a limited time.

The difference between these two pricing options. Regular price is the
standard cost of a product. This is the price that a customer will pay for
the product unless there is a sale going on.
 Factors to Consider when setting price
Other Pricing Method
Discount Pricing
The product and servicesare offered at a reduced price.

Eg. Trade discount, Cash discount, Early bird discount etc.

Markdown or Clearance pricing

To cut down the actual price of the product to increase the sale.

People tend to buy more (even when they don't need) when there isa drop in the price
of the product. This strategy helps to sell stocks fast at a lower profit. Product sold at
&
markdown means lower profit not at loss.

Both markdowns and sales discounts involve the reduction of price -but for different reasons.
Amarkdown is
an adjustment of price to reflect a lower market value, whereas a sales discount
doesn't change the valuation of a good or service.
 Factors to Consider when setting price
Other Pricing Method
Picg

Promotional pricing is a sales strategy in which aseller or a brand temporarily reduces the
price of a product or a service for a limited period of time with the goal to attract more
customers.Promotional pricing works by increasing the customer'surgency to purchase with
a limited-offer deal
Difference between discount &
promotional pricing.
While discounts refer only to the price and actual sale of a product, promotions are far
more varied and include a vide range of marketing and sales tactics that can start before
someone even considers becoming a customer.
Companiesadopt several promotional pricing schemes.
1) Special event price
2) Cash rebate
3) Low interest financing

4) Loss-leader pricing (discount on well know brands)

5) Warranties and service contracts

6) Psychological discounting
 Factors to Consider when setting price
Other Pricing Method

Freemium Pricing
A combination of the words "free" and "premium" freemium pricing is when
companies offer a basic version of their products hoping that user will
eventually pay to upgrade or access more features.

Freemium pricing strategy commonly used by Saas and other software

companies.
They choose this strategy because free trials and limited memberships offer a
peek" into a software's full functionality.

Eg. 15 days free trail of Netflix, basic version of tally etc.

THANK YOU