pricing of services n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Pricing of Services PowerPoint Presentation
Download Presentation
Pricing of Services

Loading in 2 Seconds...

play fullscreen
1 / 12

Pricing of Services - PowerPoint PPT Presentation


  • 526 Views
  • Uploaded on

Pricing of Services. Chapter 17. Pricing of Services. What makes pricing of services more difficult than pricing of goods? For example, why are some services priced higher than other? . Three Key Ways that Service Prices are Different for Consumers. Customer Knowledge of Service Prices

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Pricing of Services' - emmly


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
pricing of services1
Pricing of Services
  • What makes pricing of services more difficult than pricing of goods?
  • For example, why are some services priced higher than other?
three key ways that service prices are different for consumers
Three Key Ways that Service Prices are Different for Consumers
  • Customer Knowledge of Service Prices
    • Service variability limits knowledge
    • Providers are unwilling to estimate prices
    • Individual customer needs vary
    • Collection of price information is overwhelming in services
    • Prices are not visible
  • The Role of Non-monetary Costs
    • Time costs
    • Search costs
    • Convenience costs
    • Psychological costs
  • Price as an Indicator of Service Quality
approaches to pricing services
Approaches To Pricing Services
  • Cost-Based Pricing
    • Price = Direct cost + Overhead costs + Profit margin
    • Why may this be difficult for services?
  • Competition-Based Pricing
    • Examples include, banks and other financial institutions
  • Demand-Based Pricing
    • What customers will pay for the service
    • Usually based on some criteria of value
three basic marketing price structures and challenges associated with their use for services
Three Basic Marketing Price Structures and Challenges Associated with Their Use for Services

Figure 17.1

Challenges:

1. Costs difficult to trace.

2. Labor is more difficult to

price than materials.

3. Costs may not equal the value that customers perceive the services are worth.

Challenges:

1. Small firms may charge too

little to be viable.

2. Heterogeneity of services

limits comparability.

3. Prices may not reflect customer value.

Cost-based

Competition-

based

Demand-based

Challenges:

1. Monetary price must be adjusted to reflect

the value of non-monetary costs.

2. Information on service costs is less available to

customers; hence, price may not be a central factor.

four customer definitions of value
Four Customer Definitions of Value

Figure 17.4

Value is everything

I want in a service.

Value is low price.

Value is the

quality I get for

the price I pay.

Value is all that

I get for all

that I give.

pricing strategies when the customer defines value as low price
Pricing Strategies When the Customer Defines Value as Low Price

Figure 17.5

Value is low price.

  • Discounting
  • Odd pricing
  • Synchro-pricing
  • Penetration pricing
pricing strategies when the customer defines value as everything wanted in a service
Pricing Strategies When the Customer Defines Value as Everything Wanted in a Service

Figure 17.8

Value is everything

I want in a service.

  • Prestige pricing
  • Skimming pricing
pricing strategies when the customer defines value as quality for the price paid
Pricing Strategies When the Customer Defines Value as Quality for the Price Paid

Figure 17.10

Value is the quality I get for the price I pay.

  • Value pricing
  • Market segmentation pricing
pricing strategies when the customer defines value as all that is received for all that is given
Pricing Strategies When the Customer Defines Value as All That Is Received for All That Is Given

Figure 17.13

Value is all that I get for all that I give.

  • Price framing
  • Price bundling
  • Complementary pricing
  • Results-based pricing
summary of service pricing strategies for four customer definitions of value
Summary of Service Pricing Strategies for Four Customer Definitions of Value

Figure 17.14

Value is everything

I want in a service.

Value is low price.

  • Discounting
  • Odd pricing
  • Synchro-pricing
  • Penetration pricing
  • Prestige pricing
  • Skimming pricing

Value is the quality

I get for the price I pay.

Value is all that I get

for all that I give.

  • Value pricing
  • Market segmentation pricing
  • Price framing
  • Price bundling
  • Complementary pricing
  • Results-based pricing