How Important is Pricing?How Important is Pricing?

It is an element of the It is an element of the Marketing Mix Marketing Mix

Satisfactory pricing means…Satisfactory pricing means… Consumer views the purchase as a Consumer views the purchase as a

value and the business makes a profitvalue and the business makes a profit

SWBAT-ID 3 Pricing strategies and apply them to the Entertainment Industry

Pricing StrategiesPricing Strategies

Premium pricingPremium pricing High price, high qualityHigh price, high quality

Ex: The Ritz HotelEx: The Ritz Hotel

Penetration pricingPenetration pricing Offers low price on an item to gain Offers low price on an item to gain

market share-then increases price market share-then increases price Ex: Introductory menu itemsEx: Introductory menu items

Price skimmingPrice skimming Prices are high - usually during introductionPrices are high - usually during introduction

Ex: new entertainment releasesEx: new entertainment releases Ultimately prices will reduceUltimately prices will reduce

SWBAT-ID 3 Pricing strategies and apply them to the Entertainment Industry

Your task:Your task:

Find products related to the Find products related to the entertainment industry that are entertainment industry that are strategically priced at a premium level, strategically priced at a premium level, penetration level and skimming level.penetration level and skimming level.

For each product explain using a For each product explain using a minimum of 3-4 sentences, minimum of 3-4 sentences, whywhy you you believe it is the strategy you labeled.believe it is the strategy you labeled.

SWBAT-ID 3 Pricing strategies and apply them to the Entertainment Industry

Psychological pricingPsychological pricing Gets customers to respond on an Gets customers to respond on an

emotional basis, rather than rational. emotional basis, rather than rational. Ex: $.99 not $1.00 price point perspectiveEx: $.99 not $1.00 price point perspective

Seasonal Pricing variationsSeasonal Pricing variations ‘‘Off-peak’ pricing, early booking discounts etcOff-peak’ pricing, early booking discounts etc

Promotion pricingPromotion pricing Special pricing for a limited amt of time (BOGO) Ex: Special pricing for a limited amt of time (BOGO) Ex:

PaylessPayless

Captive PricingCaptive Pricing Companies will charge a Companies will charge a premiumpremium price on the price on the

products cproducts complimentsompliments. . Ex: a razor manufacturer will charge a low price for Ex: a razor manufacturer will charge a low price for

the first plastic razor and recoup its margin (and the first plastic razor and recoup its margin (and more) from the sale of the blades that fit the razormore) from the sale of the blades that fit the razor

SWBAT-ID 4 add’l pricing strategies and apply them to the entertainment industry

Your task:Your task:

Find products related to the Find products related to the entertainment industry that are entertainment industry that are strategically priced using the following strategically priced using the following strategies: psychological, seasonal strategies: psychological, seasonal variations, promotional and captive variations, promotional and captive level.level.

For For eacheach product explain using a product explain using a minimum of 3-4 sentences, minimum of 3-4 sentences, whywhy you you believe it is the strategy you labeled.believe it is the strategy you labeled.