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Pricing Theories: Balaji K

This document provides an overview of pricing theories and concepts. It discusses the dimensions, objectives, mechanisms, techniques, methods, problems, and policies related to pricing. Key points covered include the competitive, time, geographic, and business dimensions of pricing; objectives like profit maximization and market share maintenance; pricing mechanisms and strategies; techniques like perceived value, cost-plus, and competition-oriented pricing; methods like skimming and penetrating pricing; and problems such as transfer pricing and price discrimination.

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8K views11 pages

Pricing Theories: Balaji K

This document provides an overview of pricing theories and concepts. It discusses the dimensions, objectives, mechanisms, techniques, methods, problems, and policies related to pricing. Key points covered include the competitive, time, geographic, and business dimensions of pricing; objectives like profit maximization and market share maintenance; pricing mechanisms and strategies; techniques like perceived value, cost-plus, and competition-oriented pricing; methods like skimming and penetrating pricing; and problems such as transfer pricing and price discrimination.

Uploaded by

manojkumar024
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Pricing Theories

by
Balaji K
Overview
 Dimensions of Pricing
 Objectives of Pricing
 Pricing Mechanism
 Pricing Techniques
 Pricing Methods and Problems
 Transfer Pricing
 Pricing Policies

2
Dimensions of Pricing

 Competitive Dimension
 Time Dimension
 Geographic Dimension
 Dimension on the Basis of Business
 Marketing Mix
 Product Life Cycle

3
Objectives of Pricing
 Price Stabilisation
 Maintenance of Market Share
 Target return on Capital
 Prevention of Competition(Monopoly Power)
 Ethical Pricing Policy
 Good Return for Product Line(Multi Product firm
having Common Costs
 Liquidity(Customers with Prompt Payment)

4
Pricing Mechanism
 Selection of Market Targeted
 Brand Image
 Determination of Marketing Mix
 Selection of Specific Techniques
 Selection of Pricing Strategy
 Setting up Specific Price

5
Framing a Pricing Policy
 Seven Main Parties are to be Considered
 They are
 1)Sales Agents
 2)Existing Competitors
 3)Potential Competitors
 4)Consumers of the Product
 5)Middlemen 6)Suppliers and 7)Govt

6
Pricing Techniques
1)Profit Maximisation Rule(MR =MC) or MR
> MC
2)Demand related Pricing Technique
a)Perceived Value Pricing
b)Demand Differential Pricing
3)Cost Related Pricing
a)Suggested Retail Pricing
b)Incremental Cost Pricing

7
Pricing Techniques Contnd.,
3 )c) Target Pricing
d) Cost Plus Pricing
4)Competition Oriented Pricing
a)Pricing in Competitive Vs Monopoly
environment
b)Pricing in Established Markets
c)Going Rate Pricing
d)Sealed Bid Pricing

8
Pricing Methods

1) Skimming Pricing
2) Penetrating Pricing

9
Problems in Pricing
Transfer Pricing
Differentiated Pricing or Price
Discrimination
Dumping
Solution:
Antidumping Duty

10
k Y ou
Th a n

Complements (-) vs Substitutes (+)


defined by sign of cross price elasticity

11

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