Marketing Mix: Price

marketing mix: price

1. PRINCIPLES OF MARKETING MARKETING MIX: PRICE Prepared by: Renoah Layne Parcon Grade 12- ABM1 Victorias National Highschool October 17,2018

2. WHAT IS PRICE? A pricing value that a marketer changes for a product or services. From the point of view of the business, products and services are offered with the intention of making profit

3. Pricing strategies The following are the strategies that can be used in pricing a product

4. 1. mark-up pricing is the ratio between the  cost  of a good or service and its selling  price .  added onto the total  cost  incurred by the producer of a good or service in order to cover the costs of doing business and create a profit.

5. Example of mark-up pricing

6. 2. Target return pricing Allows the product manufacturer to recover a certain portion of his/her investment every year.  is calculated as the money invested in a venture, plus the  profit  that the investor wants to see in  return , adjusted for the time value of money .

7. The formula of obtaining a product’s target return price is follows.

8. 3.Odd or psychological pricing   Method based on the belief that certain  prices  or  price ranges are more appealing to buyers . Premised on the consumers will perceive products with odd price endings as lower in price than they usually are.

9. Example:

10. 4.Loss leader pricing Utilized by supermarkets where they will deliberately price these “loss leader” or comparison items low to make their outlet appear more adorable than other .

11. Example:

12. 5. Price lining Designed to simplify a consumer’s buying decision. This method involves reducing the number of price points on merchandise to as little as possible, in extreme cases to only one price point.

13. Example:

14. 6. Prestige pricing Disregards the unit cost of a product but instead capitalizes on high value perception or positive brand reputation of a product a price much higher than its unit cost.

15. Example:

16. 7.Marginal pricing Business organization prices its product at a range below its unit cost buy higher than its unit variable cost. By this policy, a producer charges, for each product unit sold, only the addition to total  cost  resulting from materials and direct labour .

17. Example:

18. 8. Predatory pricing Where the firms prices its product lower than unit variable cost, initially resulting in short term losses. It is illegal in most countries including Philippines (under Republic Act 8479).

19. Example:

20. 9. Going rate pricing Where a company prices its product at the same level or very close to its competitor’s price.

21. EXAMPLE:

22. 10. Promotional pricing   artificially increases a product's value for a sales boost. In addition to a lower  price , a  promotion  increases value by creating a perception of time-based scarcity . It is a temporary reduction

23. Example:

24. Reference: https:// www.priceintelligently.com/blog/bid/181764/Psychological-Pricing-Strategy-Where-s-Your-Head-At https ://www.promodo.com/blog/pricing-strategies-in-marketing-6-pricing-methods-for-your-business / https://www.marketing91.com/prestige-pricing / https:// www.mbaskool.com/business-concepts/marketing-and-strategy-terms/11235-odd-even-pricing.html