Measuring Current and Future Demand

Estimating Current Market Demand

Total Market Potential Area Market Potential Industry Sales and Market Share

Estimating Future Market Demand

Survey of Buyers Intentions : In various time frame Sales Force Opinions: Sales executives Expert Opinion: Dealers, Suppliers, Experts, Trade Association etc. Past Sales Analysis : Trend, Past Sales Market Test Method : New Product, Idea

Price

Price
The amount of money charged for a product or service or the sum of the values that consumer exchanges for the benefits of having the product.

Pricing Objectives

Survival: Short term Maximize Current Profit: Price and demand equilibrium Maximize Market Share : Long term Maximum Market Skimming : New product Product Quality Leadership : High price for high performance Cost Recovery : Non profit, Public organization

Factors Affecting Pricing Decisions ( Internal factors)

Marketing Objectives : Target market, Positioning Marketing Mix Strategy : Category, Design, Distribution, Promotion Cost: Fixed cost, Variable cost. Cost as a Function of Production Experience: Learning curve Organizational Consideration : Opinion of various head of departments.

Factors Affecting Pricing Decisions ( External factors)

Nature of the Market: Pure competition,

monopolistic, oligopoly, pure monopoly.

Consumers Perception About Price and Value. Competitors Price, Cost and Offers. Other External Factors: Economic condition,
Interest rate,Government,Social concern

Pricing Approaches

Cost based pricing Cost plus pricing Break even pricing Value based pricing Competition based pricing

Pricing Strategies for New Product

Market Skimming Pricing Market Penetration Pricing

Product Mix Pricing strategy

Product Line Pricing: Price based on cost differences. Optional Product Pricing: Price of optional accessories or parts. Captive Pricing Strategies: Exp. Blade for a razor, film for a camera etc. By Product Pricing Product Bundle Pricing: Bundle tickets, Family

suite in hotel

Price Adjustment Strategies

Discount and Allowance Pricing: cash discount, quantity discount, seasonal discount, allowance for an old item. Segmented Pricing : For seniors, children etc Psychological Pricing: Special product Promotional Pricing: Temporary pricing Geographical Pricing: DAT,DAP etc International Pricing : Based on country status