Session Outline
  What Is a Price?
  Factors to Consider when Setting Prices
  Pricing Strategies  
  Pricing Process
         What Is a Price?
  The  amount  of  money  charged  for  a  product  or 
  service,  or  the  sum  of  the  values  that  customers 
  exchange  for  the  benefits  of  having  or  using  the 
  product or service.
    Factors to Consider when Setting Prices 
                              Other internal and external 
                              Other internal and external 
                                     considerations
                                     considerations
                                  Marketing strategy, 
         Customer                 Marketing strategy, 
         Customer 
                                  objectives, and mix
      perceptions of              objectives, and mix              Product costs 
      perceptions of                                               Product costs 
                               Nature of the market and 
           value               Nature of the market and 
           value 
                                        demand
                                        demand
                              Competitors’ strategies and 
                              Competitors’ strategies and 
                                         prices 
        Price Ceiling                    prices                      Price Floor 
        Price Ceiling                                                Price Floor 
     No demand above                                               No profits below 
     No demand above                                               No profits below 
         this price                                                   this price
         this price                                                   this price
     Customer Perceptions of Value
   In the end, the customer will decide whether a 
   product's price is right. Pricing decisions, like 
   other marketing mix decisions, must start with 
   customer value. 
            Value-Based Pricing Versus Cost-Based Pricing 
          The                                Cost-Based Pricing 
        Wrong                  Setting  prices  based  on  the  costs  for 
         Way                   producing,  distributing  and  selling  the 
                               product plus a fair rate of return for effort 
                               and risk. 
                                                                        Convince 
       Design a            Determine              Set price             Convince 
       Design a            Determine              Set price             buyers of 
        good                 product              based on              buyers of 
        good                 product              based on              product’s 
       product                costs                  cost               product’s 
       product                costs                  cost                 value 
                                                                          value