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Copyright © Cengage Learning. All rights reserved Types of Pricing Strategies 13 | 1.
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Transcript of Copyright © Cengage Learning. All rights reserved Types of Pricing Strategies 13 | 1.
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Copyright © Cengage Learning. All rights reserved
Types of Pricing Strategies
13 | 1
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Copyright © Cengage Learning. All rights reserved
Pricing Strategies
• New-product strategies– Price skimming
• Charging the highest possible price for a product during the introduction stage of its life cycle
– Penetration pricing• Setting a low price for a new product to
quickly build market share and discourage competitors
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Copyright © Cengage Learning. All rights reserved
Pricing Strategies (cont’d)
• Differential pricing– Charging different prices to different buyers for the
same quality and quantity of product– The market must consist of multiple segments with
different price sensitivities– Negotiated pricing
• Establishing a final price through bargaining
– Secondary-market pricing• Setting one price for the primary target market and a
different price for another market
– Periodic discounting• Temporary reduction of prices on a patterned or
systematic basis
– Random discounting• Temporary reduction of prices on an unsystematic basis
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Copyright © Cengage Learning. All rights reserved
Pricing Strategies (cont’d)
• Psychological pricing– Odd-number pricing
• Setting prices using odd numbers that are slightly below whole-dollar amounts
– Multiple-unit pricing• Setting a single price for two or more units
– Reference pricing• Pricing a product at a moderate level and positioning it next to a
more expensive model or brand
– Bundle pricing• Packaging two or more complementary products and selling them
for a single price
– Everyday low prices (EDLPs)• Setting a low price for products on a consistent basis
– Customary pricing• Pricing on the basis of tradition
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Copyright © Cengage Learning. All rights reserved
Pricing Strategies (cont’d)
• Product-line pricing– Establishing and adjusting the prices of
multiple products within a product line– Captive pricing
• Pricing the basic product in a product line low, but pricing related items at a higher level
– Premium pricing• Pricing the highest-quality or most versatile
products higher than other models in the product line
– Price lining• Setting a limited number of prices for selected
groups or lines of merchandise
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Copyright © Cengage Learning. All rights reserved
Pricing Strategies (cont’d)
• Promotional pricing– Price leaders
• Products priced below the usual markup, near cost, or below cost
– Special-event pricing• Advertised sales or price cutting linked to a
holiday, season, or event
– Comparison discounting• Setting a price at a specific level and
comparing it with a higher price
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