Pricing Flashcards
The only element of the marketing mix that directly produces revenue
price
most flexible marketing mix element
price
marketing mix element that is top factor in customer choice
price
What is this example?
iPhone prices were so high. It boosted their bottom line and revenues.
Price
How do you price offerings?
Price Ceiling: Customer perception of value
Price Floor: Product Cost
Influencers: Competition and other strategic factors
Price Planning (6)
1 develop pricing objectives 2 estimate demand 3 determine costs 4 evaluate pricing environment 5 choose pricing strategy 6 choose pricing tactics
Some Pricing Strategies: (5)
Cost-Plus - use your floor than indicate your desired margin (not too forward looking)
Competition-based - going rate, price leadership
New product - Skimming, Penetration, Trial
Value Based - EDLP, EVC - economic value to the customer
Demand-based - yield management, dynamic pricing, target costing
What is this example?
the first iPhone was priced iPod + phone because essentially it did both!
Value based Pricing
What is this example?
Walmart’s everyday low price
Value-Based EDLP
What is this example?
EasyMarkit - helps dental offices with phone calls - they say that they makeup $2000 in lost revenue per lapsed patient so they add $11,000 per month to a dental practice. They charge $4200 per year
CPA = $2,200
Value Based EVC economic value to the customer
What is this example?
hotel rooms cost more when closer to date for book.
Feedvisor is an algorithmic pricing platform for online retailers on Amazon
Beyondpricing.com does automatic pricing with Airbnb
demand based pricing - dynamic pricing
What is this example?
Coke machine that changed price based on temperature
demand based
dynamic pricing
but everyone hated it because it compromised brand authenticity
What is this example?
Uber “Surge” Pricing
Demand based
dynamic pricing and yield management
it works because of brand authenticity (credibility and integrity) transparent
Target Costing
Starts with the demand-based ideal price and then designs offerings to deliver the desired value at the target price
What is this example?
Someone needed to create a cheap spin brush so they did with a cheap motor thing that mimicked the expensive one
Demand-based Pricing: Target Costing
