Developing
Pricing Strategie
s
3of 5
How should a company
adapt prices to meet varying
circumstances and
opportunities?
Companies usually do not set a
single price
Rather they
develop a pricing
structure
These structures reflect variations in geographical demand and cost, market segment requirements and
other factors.
Geographical PricingHow to price in different locations
and countries?
Considering shipping costs, exchange rates.
When buyers lack sufficient funds , they offer other items in payments known as Countertrade
Forms of CountertradeBarter
Compensation Deal – part cash part products
Buyback – partial payment from products manufactured from supplied equipment
Offset – full payment in cash but a substantial amount of money to be spent in that country
Discounts
&Allowances
Used as a tool to close deals.But should not be encouraged as
norm.
Promotional Pricing
@Loss Leader Pricing
Supermarkets often drop prices on well known brands to simulate traffic
@Special Event Pricing
@Special Customer
Pricing
@Low Interest
Financing
& @Longer Payment
Terms
@Warranties & Service Contracts
@Psychological Discounts
Differentiated Pricing
First Degree Discrimination - Separate price depending of intensity of demand
Second Degree Discrimination - Less charges to buyers of larger volumes
Third Degree Discrimination – Different prices for different classes of buyers
Third Degree Discriminatio
n Types
@Customer Segment Pricing
@Product Form Pricing
@Channel Pricin
g
@Location Pricin
g
Created by Ronak Jain, NIT Surat, during an internship by Prof. Sameer Mathur,
IIM Lucknow.
www.IIMInternship.com