Goals. Discuss pricing strategies used by businesses to increase sales. List five steps for determining price. Lesson 9.2 Pricing Strategies
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1 Lesson 9.2 Pricing Strategies Goals Discuss pricing strategies used by businesses to increase sales. List five steps for determining price. Slide 21
2 Terms operating expenses markup price lines loss-leader pricing Slide 22
3 PRICING CONSIDERATIONS price the amount that customers pay for products and services Slide 23
4 pricing the process of establishing and communicating the value of goods and services to customers operating expenses all the costs associated with running your business markup the amount that is added to the cost of an item to cover operating expenses and allow for a profit Slide 24
5 pure competition many companies offering the same product customers do not recognize major differences in the brands the market will drive the prices low as businesses compete for consumers business market price determined by laws of supply and demand if not sufficient to cover costs and allow for a profit, the business will cease production of the product Slide 25
6 Pricing Policies one-price policy all customers pay the same price for a product flexible pricing policy allows customers to negotiate a price within a range Slide 26
7 price lines distinct categories of merchandise based upon price, quality, and features Slide 27
8 price lines Slide 28
9 geographic pricing allows pricing variations based upon geographic location Slide 29
10 A Variety of Pricing Strategies Psychological Pricing creating an illusion for customers Slide 30
11 A Variety of Pricing Strategies Psychological Pricing creating an illusion for customers Prestige Pricing higher-than-average pricing targets customers seeking status and quality Slide 31
12 Volume Pricing when a supplier provides a lower price to a customer who buys a high volume of product Promotional Pricing offering customers an incentive to get them in the store two-hour/ 50% off sale Slide 32
13 Volume and Promotional Slide 33
14 Loss-Leader Pricing the willingness to take a loss on the reduced prices of selected items in order to create more customer traffic Slide 34
15 special event promotion associates a special sale with a major event Slide 35
16 rebates coupons on products that customers can mail in for a refund depends upon further action by the customer Slide 36
17 multiple-unit pricing a volume based discount Trail Mate Hefty Hauler with Super Heavy Duty Expanded Steel Basket as pictured $879. Without Basket $769. Call for price quote on multiple unit purchase. Slide 37
18 trade-in allowance giving a store your old product when purchasing a new product usually results in a discount on the new product purchase Slide 38
19 List and describe five pricing strategies to increase sales. Slide 39
20 DETERMINING THE PRICE There are five steps to determining the price to charge for a product or service. Slide 40
21 1. Establish the price objectives. 2. Determine the cost of the product or service. 3. Estimate consumer demand for your product or service. 4. Study the competition. 5. Decide on a pricing strategy. Slide 41
22 List the five steps for determining price. Slide 42
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