SMM A
SMM A
SMM A
Cont…
• Price is used very largely as a tactical weapon, a
role to which, because of its flexibility, it is well
suited. There are several ways in which this
tactical role can be performed, including:
• ➡ Varying prices to reflect geographic
differences
• ➡ Offering discounts for early payment, off-
season buying, and to encourage high volume
purchases
Cont…
• ➡ Trade-in allowances to boost sales when the economy
generally is sluggish
• ➡ Discriminatory pricing in order to capitalize upon the
ability or willingness of particular market segments to pay a
higher price
• ➡ Optional feature pricing, which allows the price of the
basic product such as a car to be kept low, but for
substantial profits then to be made by adding accessories
such as a sunroof
• ➡ hitting at competitors who appear particularly
vulnerable.
Cont…
• Perhaps the most obvious and most important
tactical role that can be played by price stems from
the periodic need or opportunity to raise or lower
prices in order to gain or retain a competitive
advantage. Price cutting, for example, can be used to
put pressure on competitors and reverse a falling
market share. Equally, it can be used to solve the
problem of short-term excess capacity. Raising prices
can often be a means of overcoming the problems of
excess demand and generating an increase in profits.
Cont…
• Faced with a price change that is initiated by a
competitor, the strategist has a number of
choices:
• ➡ Follow by increasing prices by the same
amount
• ➡ Keep prices the same in the hope that those
who have previously bought from the competitor
will be encouraged to shift supplier
• ➡ Cut prices to increase the price differential.
Pricings methods /strategies
• There are different kind of pricing method that mostly used by all
organization these are:-
• Three general pricing strategies: customer value-based pricing,
cost based pricing, and competition-based pricing.
• New product pricing strategies : marketing penetration and
skimming pricing
• Product mix strategies: product line pricing, optional & captive
product pricing, by product pricing and product bundling pricing.
• Price adjustment strategies: Discount and allowance pricing,
Psychological pricing, Geographical pricing, Promotional pricing
and Dynamic pricing.
Major pricing strategies
• Companies usually adjust their basic prices to account for various customer
differences and changing situation, ways of adjustments are:-
• Discount and allowance pricing: - Reducing prices to reward customer
responses such as paying early or promoting the product
• Segmented pricing: Adjusting prices to allow for differences in customers,
products, or locations Psychological pricing: - Adjusting prices for
psychological effect
• Promotional pricing: - Temporarily reducing prices to increase short-run sales
• Geographical pricing: - Adjusting prices to account for the geographic
location of customer’s
• Dynamic pricing:- Adjusting prices continually to meet the characteristics and
needs of individual customers and situations
• International pricing:- Adjusting prices for international markets