MARKETING Pricing Strategies. Overview. Definition of price Factors that influence the pricing decision Pricing objectives Pricing strategies over the product life cycle Three major pricing strategies and their advantages and disadvantages
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Price -- Definition
Price perflash drive/memory stick
Number of flash drives/memory sticks demanded
measure of the sensitivity of demand to changes in prices
not price sensitive - no real change in demand
price sensitive - changes in demand
Price/unit –Variable cost/unit
EX: $0.50 + $0.50 =$1.00 (production cost)
Low price establish product in the market
Elastic demand; Predatory pricing
High price; unique product; appeal to early adopters; Prestige pricing
Recovering high R&D costs
Move inventory; stimulate D; extend product life
Penetration Price Strategy
Skimming Price Strategy
Skimming > Penetration
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Burger King introduces a new range of value meals.
Nokia launches a new videophone.