Revel flashcards: Chapter 7.4 What are the different pricing objectives, policies and strategies?

Question 1

5 steps in determining a price range:

Difficult to generalise to all businesses.

Answer 1

1) Pricing objectives: Corporate and marketing objectives of the organisation are taken into account for the pricing decision.

2) Demand assessment: market potential and consumer reaction to different price levels.

3) Pricing policies and strategies: Deal with long term issues with positioning and enable a firm to achieve corporate and marketing objectives.

4) Setting the price range: Price can generate acceptable levels of income and managers will need to assess how competition will react to changes in price

5) Pricing tactics and adjustments: Focuses on practical application of pricing in the marketing mix and market segments being served

Question 2

Pricing objectives:

Answer 2

• Should be closely linked with marketing and organisational objectives.
• Objectives should not be fixed, to enable to meet changing needs and pressures.
• Should be clearly defined, detailed, time specific and never inconsistent with eachother.

Question 3

Price matching:

Answer 3

• Makes customers more price sensitive, also encourage brand switching.