Chapter 11 - Step 7.2: Price, Determining Incentives & Disincentives Flashcards
Price as the second P
Price is the cost that the prio audience associates with adopting the desired behaviour
Can be monetary or nonmonetary (time, effort, energy)
Six price-related tactics
4 that focus on desired behaviour (DB):
1. Increase $ benefit for DB
2. Increase non-$ benefit for DB
3. Decrease $ cost for DB
4. Decrease non-$ cost for DB
2 that focus on competing behaviour (CB):
5. Increase $ cost of CB
6. Increase non-$ cost of CB
Objective for price setting
Increase benefits, decrease costs
Eg of increasing $ benefits for DB
Rebates, gift cards, cash incentives, etc
Eg of increasing non-$ benefits for DB
Recognition, pledges
Eg decrease $ cost for DB
Discounts, rebates, gift cards (bike helmet discounts)
Decrease non-$ costs for DB
Deliver psychological rewards (public recognition)
Gathering endorsements from credible sources (reduce the potential stigma)
Providing reassuring information (a free trial)
Soliciting seals of approval from authoritative institutions
Increase $ costs for CB
Increasing taxes & fines, decreasing funding
Understand audience’s BCOS factors
eg: texting and driving becoming a primary offense
BCOS factors
Benefits
Costs
Others
Self-assurance
Increase non-$ costs for CB
Increase actual or perceived nonmonetary costs (emphasize negative public recognition)
Setting prices for tangible goods and services
Cost-based pricing
Competitive-based pricing
Value-based pricing
Cost-based pricing
Prices are based on a desired or established profit margin or rate of return on investment
Competitive-based pricing
Prices are more driven by the prices for competing products and services
Value-based pricing
Prices are based on an analysis of the target adopters’ “price sensitivity”, evaluating demand at varying price points
Ethical considerations for pricing strategies
Social equity
Potential exploitation
Public shame tactics
Full disclosure of costs
