...PRICING AND PRICING POLICIES PRICING Pricing is the process whereby a business sets the price at which it will sell its products or services. It is a method adopted by a firm to set its selling price. It usually depends on the firm's average costs, and on the customer's perceived value of the product in comparison to his or her perceived value of the competing products. Different pricing methods place varying degree of emphasis on selection, estimation, and evaluation of costs, comparative analysis, and market situation. See also pricing strategy. PRICING POLICIES Pricing policy refers how a company sets the prices of its products and services based on costs, value, demand, and competition Pricing Policies provide the framework and consistency needed by the firm to make reasonable, practicable, and effective pricing decisions. Although policies in any area of management are difficult to develop, firms with a well-established set of pricing policies usually make consistently better pricing decisions than firms without such policies. STEPS IN SETTING A PRICING POLICY 1.) Selecting the Pricing Objective – it is where the company wants to position its product a. Survival b. Maximum Current Profit - estimate the demand and costs associated with alternative prices and choose the price that produces maximum current profit, cash flow, or rate of return on investment. c. Maximize Market Share/ Market Penetration – low price d. Maximum Product Skimming...
Words: 2081 - Pages: 9
...Q2 PRICING POLICY Pricing policy refers to how a company sets the prices of its products and services based on costs, value, demand, and competition. Managers should start setting prices during the development stage as part of strategic pricing to avoid launching products or services that cannot sustain profitable prices in the market. This approach to pricing enables companies to either fit costs to prices or scrap products or services that cannot be generated cost-effectively. Through systematic pricing policies and strategies, companies can reap greater profits and increase or defend their market shares. FACTORS INVOLVED IN PRICING POLICY The pricing of the product involves consideration of the following factors: (i) Cost Data in Pricing: Cost data occupy an important place in the price setting processes. There are different types of costs incurred in the production and marketing of the product. There are production costs, promotional expenses like advertising or personal selling as well as taxation, etc. They may necessitate an upward fixing of price. For example, the prices of petrol and gas are rising due to rise in the cost of raw materials, such as crude transportation, refining, etc. If costs go up, price rise can be quite justified. However, their relevance to the pricing decision must neither be underestimated nor exaggerated. For setting prices apart from costs, a number of other factors have to be taken into consideration. They are demand and competition. Costs...
Words: 1429 - Pages: 6
...പുനത്തിൽ കുഞ്ഞബ്ദുള്ള രചിച്ച നോവലാണ് സ്മാരകശിലകൾ. നോവൽ സാഹിത്യത്തിനുള്ള 1978-ലെ കേരള സാഹിത്യ അക്കാദമി അവാർഡും 1980-ലെ കേന്ദ്ര സാഹിത്യ അക്കാദമി അവാർഡും ലഭിച്ച കൃതിയാണിത്.[1]പുനത്തിലിന്റെ മികച്ച കൃതിയായി സ്മാരകശിലകൾ കണക്കാക്കപ്പെടുന്നു.[2] വടക്കൻ മലബാറിലെ സമ്പന്നമായ അറയ്ക്കൽ തറവാടും അതിനെ ചുറ്റിപ്പറ്റിയുള്ള ഒരു വിഭാഗം ജനങ്ങളുടെയും കഥയാണ് ഈ നോവൽ പറയുന്നത്. ഖാൻ ബഹദൂർ പൂക്കോയ തങ്ങൾ, കുഞ്ഞാലി, പൂക്കുഞ്ഞീബി ആ‌റ്റബീ തുടങ്ങിയവരാണ് പ്രധാന കഥാപാത്രങ്ങൾ. ഈ നോവലിന് അവതാരിക എഴുതിയത് പ്രശസ്ത സാഹിത്യകാരൻ കോവിലൻ ആണ്. കേരള സാഹിത്യ ചരിത്രത്തില്‍ ഒരു സ്മാരകശിലയാകുകയാണ് പുനത്തില്‍ കുഞ്ഞബ്ദുള്ളയുടെ ‘സ്മാരക ശിലകള്‍’. കേരള സാഹിത്യ അക്കാദമി അവാര്‍ഡും കേന്ദ്ര സാഹിത്യ അക്കാദമി അവാര്‍ഡും ലഭിച്ച നോവലിന്റെ 65000ല്‍ അധികം കോപ്പികളാണ് ഇതിനകം വിറ്റഴിഞ്ഞിരിക്കുന്നത്. 1977ല്‍ പുറത്തിറങ്ങിയ ഈ നോവലിന്റെ ആദ്യ ഡി.സി പതിപ്പ് പുറത്തിറഞ്ഞിയത് 1993ലാണ് . നോവലിന്റെ 19ാം പതിപ്പാണ് ഇപ്പോള്‍ പുറത്തിറങ്ങിയിരിക്കുന്നത്. അതിപുരാതനവും തകര്‍ച്ചയുടെ വക്കിലെത്തിയതുമായ ഒരു പള്ളിയും പള്ളിക്ക് ചുറ്റുമുളള മനുഷ്യ ജീവിതങ്ങളുടെ കഥകളുമാണ് ‘സ്മാരക ശിലകള്‍’ പറയുന്നത്. മനുഷ്യരേയും പ്രകൃതിയേയും ചൂഴ്ന്നു നില്‍ക്കുന്ന ഒട്ടനവധി കെട്ടുകഥകള്‍ എല്ലായിടത്തുമുണ്ട്. അത്തരം മിത്തുകളെ പൊലിപ്പിച്ച് നോവലിന്റെ രൂപഭംഗി കൂട്ടാന്‍ മനപ്പൂര്‍വ്വമായ ഒരു ശ്രമവും നടത്താന്‍ പുനത്തില്‍ സ്മാരക ശിലയില്‍ ശ്രമിച്ചിട്ടില്ല. ഏതു മനുഷ്യനും ഇതിഹാസവല്‍കരിക്കുന്ന പ്രവണത എല്ലായിടത്തുമുണ്ട്. എന്നാല്‍ കെട്ടുകഥകളെ ജീവിത ഗന്ധിയായ കഥകളാക്കി മാറ്റുകയാണ് പുനത്തില്‍ ഇവിടെ ചെയ്തിരിക്കുന്നത്. ഖാന്‍ ബഹദൂര്‍ പുക്കോയ തങ്ങളാണ് നോവലിലെ പ്രധാന കഥാപാത്രം.അദ്ദേഹത്തിന് ചുറ്റുമുള്ള ജീവിതങ്ങളുടെ...
Words: 372 - Pages: 2
...Basic Pricing Policy and Concepts It is the government’s policy to obtain its products and services through contracting at fair and reasonable prices. What seems like a fairly easy undertaking is a bit more complex than the term implies. There are several factors to consider when a purchase is made. Regardless of the service or product being sought, what is fair and reasonable as it relates to price is a matter of good personal judgment. Because determining what is reasonable is determined by personal judgment, government contracting individuals may not agree on what is a reasonable price. On factor to consider when deciding on the reasonableness of the price is quality. It is expected that we will pay a little more for good quality product than we would for what would be considered “normal”. Other factors include the amount of time given to make the purchase and if there is a particular brand that is being sought. An emergency purchase is usually a bit more expensive than a purchase in which more time is available to research and negotiate price. Oftentimes, name brand items cost more than their generic or non-named counterparts. Pricing Restraints in Government Contracting The average consumer determines what they are willing to pay for a particular good/service using their own personal judgment; what is good to them. They are spending their own money and therefore don’t have to answer to anyone. They are free to purchase from whomever and where ever they choose....
Words: 508 - Pages: 3
...Introduction Company Overview Coca-Cola is the most recognized brand name in the world. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy the Company’s beverages at a rate of 1.6 billion servings a day. Their product portfolio includes sparkling beverages such as Coca-Cola®, Coke Zero™, Diet Coke®, Sprite® and Fanta®, and still beverages, such as juice and juice drinks, waters, enhanced water, sports and energy drinks, teas, coffees, dairy and soy-based drinks, and beverages with added nutritional benefits. The Coca-Cola Company, along with more than 300 bottling partners worldwide, provides more than 3,300 beverage products in more than 200 countries in which Coca Cola company operates. Their global system includes approximately 700,000 associates and its headquarters are in Atlanta, Georgia. The company segmented the whole market using geographical parameters into three segments: * Established countries: Austria, Greece, Italy, Cyprus, Northern Ireland, Republic of Ireland and Switzerland. * Developing countries: Croatia, Hungary, Estonia, Latvia, Lithuania, Poland, The Czech Republic, Slovenia and Slovakia. * Emerging countries: Belarus, Bosnia and Herzegovina, Republic of Macedonia, Bulgaria, Armenia, Moldova. Montenegro, Nigeria, Romania, Russia, Serbia and Ukraine. The segmentation for the segments is based on different criteria: * Socio-economic similarities * GDP per capita * Consumption of...
Words: 2083 - Pages: 9
...Because of the differences in national markets, a global marketer has to develop pricing systems and pricing policies that take into account price floors, price ceilings, and optimum prices. The pricing systems and policies must also be consistent with other uniquely global opportunities and threats. The other important internal organizational consideration besides cost are the many interest groups within corporations that conflict price objectives. The director of global marketing seeks competitive prices in world markets. The controller and financial vice president are concerned about profits. The manufacturing vice president seeks long production so that manufacturing can be efficient. The tax manager is concerned about compliance with government transfer pricing legislation. Finally the company counsel is concerned about the antitrust implications of global pricing practises. Thus, pricing reflects the goals set by members or the sales staff, product managers, corporate division managers and the company’s chief executive. 2. Market Skimming and financial objectives – price can be used as a strategic variable to achieve specific financial goals. When financial criteria such as profit and maintenance of margins are the objectives, the product must be part of a superior value proposition for buyers; price is thus an integral part of pricing strategy. The market skimming method involves the pricing strategy that is usually part of a deliberate attempt to reach a market...
Words: 892 - Pages: 4
...Intelligent pricing is one of the most important elements of any successful business venture. Yet many entrepreneurs fail to educate themselves adequately about various pricing components and strategies before launching a new business. Smart small business owners will weigh many marketplace factors before setting prices for their goods and services. As the Small Business Administration (SBA) indicated in The Facts About Pricing Your Products and Services, "you must understand your market, distribution costs, and competition. Remember, the marketplace responds rapidly to technological advances and international competition. You must keep abreast of the factors that affect pricing and be ready to adjust quickly." Cost Factors and Pricing There are three primary cost factors that need to be considered by small businesses when determining the prices that they charge for their goods or services. After all, price alone means little if it is not figured within the context of operating costs. A company may be able to command a hefty price for an item, only to find that the various costs of producing and delivering that item eliminate most or all of the profit that it realizes on the sale. It should also be noted that service businesses often find it more difficult to accurately gauge their costs, especially in the realm of employee hours. A freelance copyeditor may find that one 2,500-word article takes twice as long to complete as another article of the same size because of differences...
Words: 3241 - Pages: 13
...Communications | Resources | | Assessments | Academic Calendar | Scholastic Honesty | Course Evaluation | UTD Policies | Course Information Course Course Number/Section Course Title Term MKT 6336.0I1 Pricing Spring 2014 (January 13 – May 12) Professor Contact Information Professor Ram Rao Office Phone 972-883-2580 Email Address rrao@utdallas.edu Office Location SM 3.701 Teaching Assistant Office Email Address Administrative Assistant Office Phone Email Address Mohammad Zia McDermott 1.406N Mohammad.Zia1@utdallas.edu Andrea Hapeman SM 3.704 972-883-4743 andrea.hapeman@utdallas.edu Course Pre-requisites, Co-requisites, and/or Other Restrictions MKT 6301 or equivalent Course Description Pricing is the way a firm produces revenues from the value created by its product offerings. Much of marketing involves activities that are costly for the firm, while revenue generation depends on pricing that is sustainable and profitable. Students in this course will learn both the principles that can guide pricing and the practical considerations that make pricing a challenge. Sustainable and profitable pricing stands on three legs: costs, competition and consumer value. Some managers focus too much on costs, while others focus too much on competition. Decisions made in this way are typically not good. As we will see in this course, a manager is best served by making sure that pricing is consistent with the positioning strategy and thus fits well with other choices such as segmentation, advertising...
Words: 3003 - Pages: 13
...Introduction: Signode Industries Inc., a privately owned company, is the market leader in the steel strapping industry. In the early 1900’s, Signode started out as a producer and marketer of patented steel strap joints and application tools. In the 1950’s, Signode vertically integrated its business and started to purchase and process rolled steel. Signode has since become a low-cost processor of cold rolled steel. Three grades of steel strapping are manufactured: Apex, Box Band Magnus (BBM) and Heavy Duty Magnus (HDM). Today, Signode produces plastic strapping in addition to the steel strapping products and is the only producer of customized steel strapping and steel strapping machines. Signode sells its strapping products through its geographic ally organized sales force that traditionally had developed markets by specializing, by industry, some of its sales representatives. Signode’s sales force is the largest, most powerful and respected in the steel strapping industry. Signode's competitors can not provide the level of service that Signode provides. There are presently six major competitors in the steel strapping industry that account for 92% of steel strapping shipments. In 1983 Signode had a 40% market share in the steel strapping industry, however that share dropped from 50% in 1973. The biggest reason for the loss of market share is price discounting by the competition. Problem: In November of 1983 the major U.S. steel companies announced that they would increase the price...
Words: 4739 - Pages: 19
...Identify the adjustments made to the approximate price level on the basis of discounts, allowances, and geography. Discuss the laws and regulations affecting specific pricing practices. LO4 1-3 Arriving at the Final Price The TATA NANO The Car Priced at one Lakh 1-4 Opening Story – The NANO Car FIGURE 14-1 The six steps in setting price. The first three steps were covered in Chapter 13 and the last three steps in Chapter 14. LO1 1-5 Elements making up a Price – Recap of Chapter 13 FIGURE 14-2 Four approaches for selecting an approximate price level LO1 1-6 Establishing an ‘Appropriate Price Level’ Selecting an Appropriate Price Level Demand-Oriented Pricing Approaches Skimming Pricing Penetration Pricing Price Lining Prestige Pricing LO1 1-7 Establishing an ‘Appropriate Price Level’ FIGURE 14-3 Demand curves for two demand-oriented pricing approaches LO1 1-8 Establishing an ‘Appropriate Price Level’ Selecting an Appropriate Price Level Demand-Oriented Pricing Approaches Odd-Even Pricing Target Pricing Bundle Pricing Yield Management Pricing LO1 1-9 Establishing an ‘Appropriate Price Level’ Selecting an Appropriate Price Level Cost-Oriented Pricing Approaches Standard Markup Pricing Cost-Plus...
Words: 791 - Pages: 4
...1) Pharmaceutical Industry in India: India is the third largest pharmaceutical market in the world in terms of volume. The market is believed to grow at a compound annual growth rage (CAGR) of 14-17 percent in between 2012-16. There has also been a considerable growth in the levels of pharmaceutical exports from India. The industry started picking momentum in the early 1960s, with government actively encouraging the sector with the Patents Act. However, the liberalization of 1991 enabled the industry to become what it is today. Many of the Indian companies principally observe reverse engineering of the new processes for manufacturing drugs at low costs. Although some of the companies have taken baby steps towards innovating newer drugs, the industry as a whole tends to follow this business model. The lack of patent protection, on the other hand, makes India undesirable for multinational companies that have dominated the market. So the pharmaceutical market in India has a tremendous potential for indigenousness. In this context, comparing a global pharmaceutical company with its Indian counterpart becomes evident. GlaxoSmithKline and Ranbaxy: A Comparison GlaxoSmithKline is a British multinational pharmaceutical company also dealing in biologics, vaccines and consumer healthcare. Headquartered at London, it is the world’s sixth largest pharmaceutical company. The company was established in 2000 by the merger of Glaxo Wellcome and SmithKline Beckman Corporation. A giant...
Words: 3952 - Pages: 16
...Analyzing Managerial Decision: iTunes Music Pricing by HCM-540, MBOL5, Health Care Organization Instructor: Saint Leo University Distance Learning November 10, 2013 Abstract Apples’s Itunes music store came upon the music industry in 2003. It quickly became supreme within the music industry. The iPod, Apple’s MP3 players, and iTunes software were all interfacing, making it one of the more popular technology favorites among consumers. At odds with iTunes were the music companies crying foul over infringement and pricing. Buying overpriced CDs were quickly becoming a thing of the past. Music had been illegally accessed through peer-to-peer file sharing networks. With the recognition that music was being stolen, other ways were being developed by those with a stake in earning a profit. The industry had to decide if it should allow piracy to continue of develop variable pricing alternatives. This paper takes a look at alternative pricing in the case study, iTunes Music Pricing. At the conclusion, readers will have a better understanding of variable pricing policies. Introduction Variable pricing represents a concept use, by Apple, to describe the structure of pricing to advertise downloadable data. Variable pricing involves the different cost of a product for based on the preferences of the producers. This varies from the model of flat pricing, where one fixed price is applied to those items that are the same. Content of purchased songs, all cost one...
Words: 1551 - Pages: 7
...A Case Analysis on Prime Meat, Inc. (Bea’s Pricing Dilemma) Submitted by: Adajar, Julia Martha Alcachupas, Paul Joshua Crisostomo, Kenneth Ezechiel Donato, Ma. Lorena Leynes, Vonn Orland Saputil, Gemaicca Laudato Viernes, Marielle Almira I. POV Bea Lim * Bea Lim is the current marketing assistant of Prime Meat, Inc. * She was the initiator of creating new marketing strategies from Prime Meat products. * Unlike other characters mentioned in the case, Bea Lim gathered information through market research thus letting her have a grasp of the market’s perception of the product. II. Relevant Case Facts * The Executives of the company want to create a better image for their products considering their acceptability in the market. * Mr. Jay de los Reyes, the Marketing Manager has commented that current prices are lower than similar products in the market. * Prime Meat, Inc. is a big spin-off from the big feedmilling business of LCM Company located in Lipa City, Batangas. * The current volume of production in Lipa City, Batangas is 10 metric tons. * They are considering to transfer their production plant in Santo Tomas to increase the volume of production to 30 metric tons. * Their product line consists of the following: bacon, bologna, cheesedog, chicken longganisa, embutido, hamburger, hotdogs, pork tapa, tocino, sisig, skinless longganisa, glazed ham, sweet ham, smoke longganisa, and Christmas ham. * Among these products...
Words: 2371 - Pages: 10
...PRICING OF INDUSTRIAL PRODUCT AND SERVICES Introduction “Price is the measure by which industrial customers judge the value of an offering and it strongly impacts brand selection among competing alternatives”. (Shipley and Jobber (2001, p. 301). Pricing is a process where a business firm sets the price at which it will sell its products and services in such a way that it can generate profit as well as satisfy the customer, and it may be a part of the business’s marketing plan. Price management is a very critical element in marketing and competitive strategy and a key determinant of performance. Among different pricing strategies, marketing managers can choose their preferred type. The overall objective of pricing is to increase sales and profits globally (Kigan, 2001).Global Pricing subject can be fully integrated and considered into the product design process (Kigan, 2001) As the ultimate aim of the industry is to earn profits so pricing of industrial products and services should be based on desire of the customer. A company set the price for the first time for the following items i.e. when a new item is manufactured or a new product comes from normally when an item is directed to a new distribution channel, or it is offered to a new geographic area. Companies need to decide the positions of their product in terms of their quality and price. Literature review Research shows marketing scholars have devoted only little effort to pricing theory and practice. This lack of...
Words: 935 - Pages: 4
...Debbie Richards Skim, Penetration and Neutral Pricing Skim, Penetration and Neutral Pricing: Which Strategy is right for you? Debbie Richards (Director, Baker Richards) When setting pricing strategy, there are essentially three approaches that require consideration. The first of these approaches is known as Skim Pricing. This is where you deliberately set your prices high (above the rates that the market might charge) in the knowledge that you will therefore restrict the market for the product. This strategy is particularly successful where you have either a high volume of demand or where that demand is relatively inelastic in terms of price. Using this strategy can also help to reinforce the quality of your product. The Royal Shakespeare Company in the UK is a good example of a very strong, high quality brand that attracts occasional attenders for a ‘treat’, in addition to highly frequent attenders. Consequently, they are able to skim price some of their ‘best’ seats by defining them as “superseats”. The income from this premium price then helps to subsidise the lower priced seats elsewhere in the auditorium: 1 Debbie Richards Skim, Penetration and Neutral Pricing But you don’t have to have the brand awareness of the RSC to pursue this strategy. Creation Theatre Company presents site-specific theatre, including open air Shakespeare in Oxford in the UK. By identifying the key benefits sought by the sector of the market that asks for ‘the best seats’ (for the...
Words: 1006 - Pages: 5
