pricing1 by kumarsudesh123

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									Pricing
  The amount of money charged for a
  product or service, or the sum of the
values that consumers exchange for the
benefits of having or using the product
               or service
   THE PRICING EQUATION FOR CONSUMERS

PRICE = LIST PRICE - INCENTIVES & ALLOWANCES + EXTRA FEES
  THE PROFIT EQUATION FOR SELLERS



 Profit =      Total revenue        - Total cost
                      or
Profit = (Unit price × Quantity sold) −Total cost
         Factors affecting Price

•   Reference price
•   Perceived price quality
•   Threat of new entrants
•   Power of suppliers
•   Substitutes
•   Capacity situation
•   Stage in PLC
               Apple iPhone

• Launched : June 2007

• Pricing Premium Pricing

• Early adopters : Loyalists

• Price cut within 10 weeks
• Pricing of iPhone
           4 GB       8GB

Price      499$       599 $

Cost       246$       281 $

Profit     ?          ?

New Price ---         399 $
• Analyze the pricing decision
• Cause of price cut
• Implications of the price cut
   WAYS TO SELECT BASE PRICE LEVELS


Demand oriented – focus on consumer pre
								
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