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Comprehensive Guide to Selecting Effective Pricing Strategies and Adjustments

This chapter delves into the intricate pricing process, focusing on identifying constraints, estimating demand and revenue, and determining cost, volume, and profit relationships. The guide covers various pricing levels including demand-oriented, cost-oriented, profit-oriented, and competition-oriented approaches. It emphasizes the importance of setting a list price and making necessary adjustments such as discounts and allowances. Key strategies reviewed include price skimming, penetration pricing, and geographical adjustments, alongside legal considerations related to pricing practices.

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Comprehensive Guide to Selecting Effective Pricing Strategies and Adjustments

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  1. Pricing- Part Deux Chapter 20

  2. Pricing Process Identify Pricing Constraints Estimate Remand and Revenue Determine Cost, Volume, & Profit Relationships Select an Approximate Price Level Set List/Quote Price Make Special Adjustments to List/Quoted Price

  3. Step 4: Select an Appropriate Price Level • Demand-Oriented • Cost-Oriented • Profit-Oriented • Competition-Oriented

  4. Demand-Oriented • Price Skimming • Penetration Pricing • Prestige Pricing • Price Lining • Odd-Even Pricing • Target Pricing • Bundle Pricing • Yield Management Pricing Source: http://www.clker.com/clipart-125655.html

  5. Cost-Oriented • Standard Mark-up Pricing • Cost-Plus Pricing • Experience Curve Pricing

  6. Profit-Oriented • Target Profit Pricing • Target Return on Sales Pricing • Target Return-on-Investment Pricing

  7. Competition-Oriented Pricing • Customary Pricing • Above-, At-, or Below-market Pricing • Loss-Leader

  8. Step 5: Set the List or Quoted Price • One-Price v. Flexible-Price Policy • Effects • Company • Product-line pricing • Customer effects • Perceptions • Competitive • Price war Source: http://www.clker.com/clipart-price-tag.html

  9. Step 6: Make Special Adjustments to the List or Quoted Price • Discounts • Quantity Discounts • Seasonal Discounts • Trade (Functional) Discounts • $100 less 25/20/10 • Cash Discounts • $1,000 2/10 net 30

  10. Step 6: Make Special Adjustments to the List or Quoted Price • Allowances • Trade-in Allowances • Promotion Allowances • EDLP

  11. Step 6: Make Special Adjustments to the List or Quoted Price • Geographical Adjustments • FOB Origin Pricing • Uniform Delivered Pricing • Single-Zone Pricing • Multiple-Zone Pricing • Freight Absorbed Pricing • Basing-Point Pricing

  12. Legal Issues • Price fixing • Price discrimination • Deceptive pricing • Geographical pricing • Predatory pricing

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