Pricing Strategies

General pricing approaches Cost-based pricing Value-based pricing Competition-based pricing  Cost-based pricing Adding a standard markup to cost Ignores demand and competition Popular pricing technique because: Sellers more certain about cost than demand Simplifies pricing When all sellers use, prices are similar and competition is minimized Some feel it is more fair to both buyers and sellers  Value-based pricing Uses buyers’ perceptions of value rather than seller’s costs to set price. Measuring perceived value can be difficult. Consumer attitudes toward price and quality have shifted during the last decade. Introduction of less...

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Distribution Strategies

Conventional Distribution Systems Consist of one or more independent producers, wholesalers, and retailers. Each seeks to maximize its own profits and there is little control over the other members. No formal means for assigning roles and resolving conflict.  Vertical Marketing Systems (adsbygoogle = window.adsbygoogle || []).push({});  Vertical marketing systems (VMS) provide channel leadership and consist of producers, wholesalers, and retailers acting as a unified system and consist of: Corporate marketing systems Contractual marketing systems Administered marketing systems (adsbygoogle = window.adsbygoogle...

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Product Life-Cycle Strategies

Product life-cycle (PLC) is the course that a product’s sales and profits take over its lifetime. Product development Introduction Growth Maturity (adsbygoogle = window.adsbygoogle || []).push({}); Decline    Introduction stage is when the new product is first launched.Takes time Slow sales growthLittle or no profit High distribution and promotion expense    Growth stage is when the new product satisfies the market. Sales increaseNew competitors enter the market Price stability or decline to increase volume Consumer education Profits increase Promotion and manufacturing costs gain economies of scale Product quality...

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