Docstoc

Pricing of services

Document Sample
Pricing of services Powered By Docstoc
					PRICING OF SERVICES
Why service prices are different for
           consumers
 Customer knowledge of service prices is
  limited
 Role of non monetary cost: time cost,
  search cost etc
 Price as an indicator of service quality
    Approaches to pricing services
 Cost based pricing
 Competition based pricing
 Demand based pricing: what customer will
  pay for the service provided
         Pricing Strategies
 When customer means “value is low
  price”:
 Discounting
 Penetration pricing
 Odd pricing
 When customer means “value is
  everything I want in a service”:
 Prestige pricing
 Skimming pricing
 When customer means “value is the
  quality I get for the price I pay”:
 Value pricing-giving more for less
 Market segmentation pricing- charge
  different prices from different segments
   When customer means “value is all that I get for
    all that I give”:
   Price framing- provide reference prices for
    services
   Price bundling- pricing the services in a group.
    When services are used in conjunction with
    other services
   Complementary pricing-highly interrelated
    services can be leveraged by using
    complementary pricing (low sim price, high
    phone bill)
   Result based pricing-outcome of the legal case
     Factors related to Pricing
 Company
 Customers
 Market conditions
 Competitors