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The substitute awareness affect Price comparison effect: made us more price sensitive Business expenditure effect: made us less price sensitive End-benefit effect: I. E. Package travel bundled in less price sensitive The total expenditure effect: the bigger the total expense the more aware The shared cost effect: tend to be less price sensitive when sharing the cost with others The sunk investment effect: already sunk in your time so you aren’t very price sensitive.
The price quality effect: if we believe in the connection between price and quality then we will be less price sensitive. What is a jazz coca-cola worth -1. 29 paying for refrigeration -1. 99 paying for service in restaurant setting -4. 50 paying at a concert because there are no other options cheap flight but being nickel and dime for everything customers don’t want Cost-plus pricing-I. E. Wine is XX as expensive in restaurants -product, cost, price, alee, customers not a customer focused approach-only works if it generates the forecasted demand. Repacks: people see different values in different items. Break-Even analysis and target profit pricing -takes into account Competition based pricing -focus on competitors -monitor “going rate” -Avoid Price wars downside- customer is not a part of the decision. Value based pricing (turn everything upside down) Customer-value-price-cost-product (Reverse engineer your pricing) Marketing Notes By riskier You should use all of these strategies and see which yields the best result.
Pricing and the Product lifestyle New Product Pricing Premium/economy Skimming pricing: a price that moves start off high then drop price etc. Apple does this (fad like demand curve) Penetration pricing: low price right off the bat involves selling to the whole target market at one low price. Existing Product Pricing Product-line pricing Price bundling Promotional pricing (I. E. Discount tactics) quantity/volume, trade, cash, seasonal, facial event, loss leader, sales pricing.
Optional/captive pricing (I. E. Warranty) (I. E. Giving out free razor with 1 blade to try and sell their brand) Bait and switch- they say we have a special deal foots for $200 but they only have 5 so when you come in they don’t have any left so they’ll offer you a different special. Promotional Pricing: Allowances Advertising allowance- for cooperative advertising Stocking allowance- for shelf space Pushy money allowance- for retail push of certain items Coupons/rebates- trade deals passed onto buyers