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Pricing Objectives
and Policies
Product
Place
Promotion
Price
Pricing
objectives
Price
flexibility
Exhibit 17-1
17-3
Price levels
over product
life cycle
Discounts and
allowances
to whom and
when
Geographic
term
who pays
transportation
and how
Price
Price - the amount of money that is charged
for something of value.
Price = list price - discounts - allowances rebates/coupons + taxes
Pricing Objectives
Profit
Oriented
Pricing
Objectives
Sales
Oriented
Status Quo
Oriented
Exhibit 17-4
17-4
Target
Return
Maximize
Profits
Dollar or Unit
Sales Growth
Growth in
Market Share
Meeting
Competition
Nonprice
Competition
For use only with Perreault and McCarthy texts.
The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
17-5
Sell at high
price before
reducing to
next price level
and repeat
Second
price
Final
price
Quantity
Exhibit 17-5A
17-6
Penetration pricing
involves selling the
whole market at
one low price.
Whole
market price
Quantity
Exhibit 17-5B
17-7
Discount Pricing
Quantity
Seasonal
cumulative
vs noncumulative
Discount
Pricing
Sale
Cash
Trade
17-8
Allowances
Advertising
Allowance
Common Kinds
of
Allowances
Stocking
Allowance
Push Money
Allowance
Trade-In
Allowance
17-9
Common
Geographic
Pricing
Policies
Zone
Uniform
Delivered
Freight
Absorption
17-10
Value Pricing
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????
????
????
????
17-11
Focus
Focus on
on Customer
Customer
Requirements
Requirements
Target
Target Market
Market and
and
Competition
Competition
Fits
Fits with
with Strategy
Strategy
Planning
Planning