Скачать презентацию CHAPTER FIFTEEN PRICE ARRIVING AT THE FINAL PRICE Скачать презентацию CHAPTER FIFTEEN PRICE ARRIVING AT THE FINAL PRICE

9e9786e9d2b25af1d2092745383649b7.ppt

  • Количество слайдов: 23

CHAPTER FIFTEEN PRICE: ARRIVING AT THE FINAL PRICE Irwin/Mc. Graw-Hill MARKETING, 6/e BERKOWITZ KERIN CHAPTER FIFTEEN PRICE: ARRIVING AT THE FINAL PRICE Irwin/Mc. Graw-Hill MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: • Understand how to establish AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: • Understand how to establish the initial “approximate price level” using demandoriented, cost-oriented, profit-oriented, and competition-oriented approaches. • Identify the major factors considered in deriving a final list or quoted price from the approximate price level. MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: • Describe adjustments made to AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: • Describe adjustments made to the approximate price level based on geography, discounts and allowances. • Prepare basic financial analyses useful in evaluating alternative prices and arriving at the final sales price. • Describe the principal laws and regulations affecting pricing practices. MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -1 Steps in Setting Price Identify pricing constraints and objectives Estimate demand PP 15 -1 Steps in Setting Price Identify pricing constraints and objectives Estimate demand revenue MARKETING, 6/e Estimate cost, volume, and profit relationships BERKOWITZ KERIN Select an approximate price level -Demandoriented approaches -Cost-Oriented approaches -Profit-oriented approaches -Competitionoriented approaches HARTLEY RUDELIUS Set list or quoted price -One price or flexible prices -Company, customer, and competitive effects -Incremental costs and revenues Make special adjustments to list or quoted price -Discounts -Allowances -Geographical adjustments Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -AA The Gillette Mach 3 Shaving System Gillette’s world leading market share: PP 15 -AA The Gillette Mach 3 Shaving System Gillette’s world leading market share: 71% in North American and Europe 91% in Latin American 69% in India New Mach 3 shaving system is priced 35% above their highly successful Sensor Excel model, as marketing research indicated that men would be willing to pay 45% more than they were paying for Sensor given the additional benefits of the Mach 3. MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15– 2 Four approaches for selecting an approximate price level Selecting an approximate PP 15– 2 Four approaches for selecting an approximate price level Selecting an approximate price level Demand-based approaches skimming penetration prestige price lining odd-even target bundle yield management Cost-based approaches standard markup cost-plus experience curve Profit-based approaches target profit target return on sales target return on investment Competition-based approaches customary above, at, or below market loss leader © 1994, Richard D. Irwin, Inc. To accompany MARKETING, 4/E by Berkowitz, Kerin, Hartley, and Rudelius. MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -BB Demand-Oriented Pricing Approaches Demand-Oriented Approaches include: • skimming pricing • penetration PP 15 -BB Demand-Oriented Pricing Approaches Demand-Oriented Approaches include: • skimming pricing • penetration pricing • prestige pricing • price lining • odd-even pricing • target pricing • bundle pricing • yield management pricing MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15– 3 Demand curves for two types of demand-based methods A B Prestige PP 15– 3 Demand curves for two types of demand-based methods A B Prestige pricing Price lining PQ Price A B P 1 P 2 P 3 C Quantity MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -CC Concept Check 1. What are the circumstances in pricing a new PP 15 -CC Concept Check 1. What are the circumstances in pricing a new product that might support skimming or penetration pricing? 2. What is odd-even pricing? MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -DD Cost-Oriented Pricing Approaches Cost-Oriented Approaches include: • standard markup pricing • PP 15 -DD Cost-Oriented Pricing Approaches Cost-Oriented Approaches include: • standard markup pricing • cost-plus pricing • experience curve pricing MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15–A Mark-ups for a manufacturer, wholesaler and retailer on a home appliance sold PP 15–A Mark-ups for a manufacturer, wholesaler and retailer on a home appliance sold to the consumer for $100 Retailer selling price = $ 100 $100 Wholesaler selling price = $ 71. 43 Price 80 60 Manufacturer selling price = $ 59. 93 40 20 Wholesaler mark-up = $ 11. 90 = 20% Manufacturer mark-up = $ 7. 76 = 15% Retailer mark-up =$ 28. 57 = 40% Retailer cost = $ 71. 43 Wholesaler cost = $ 59. 53 Manufacturer cost = $ 51. 77 10 0 MARKETING, 6/e Manufacturer BERKOWITZ Wholesaler KERIN HARTLEY RUDELIUS Retailer Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15–B Cellular phone unit sales, average cost and average price: evidence of the PP 15–B Cellular phone unit sales, average cost and average price: evidence of the experience effect 3, 500 3, 000 2, 500 The Average Cost to Produce Decreases. . . 2, 500 As Cellular Phone Volume Increases. . . Cellular Phone in Service 2, 000 1, 500 Average cost of Least-Expensive Models 1, 000 500 0 ’ 83’ 84’ 85’ 86’ 87 ’ 88’ 89’ 90’ 91’ 92’ 93’ 94’ 95 Dollars 3, 000 Followed by Price Decreases 500 0 ’ 83’ 84’ 85’ 86’ 87 ’ 88’ 89’ 90’ 91’ 92’ 93’ 94’ 95 Dollars Average Price of Least-Expensive Models 2, 500 2, 000 1, 500 1, 000 500 Dollars MARKETING, 6/e BERKOWITZ 0 ’ 83’ 84’ 85’ 86’ 87 ’ 88’ 89’ 90’ 91’ 92’ 93’ 94’ 95 KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -EE Profit-Oriented Pricing Approaches Profit-Oriented Approaches include: • target profit pricing • PP 15 -EE Profit-Oriented Pricing Approaches Profit-Oriented Approaches include: • target profit pricing • target return-on-sales pricing • target return-on-investment pricing MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -4 Results of computer spreadsheet simulation to select price to achieve a PP 15 -4 Results of computer spreadsheet simulation to select price to achieve a target return on investment Assumptions or Results Financial Element Year A Assumptions Price per unit (P) $50 $54 $58 1. 000 Change in Unit Variable Cost (UVC) 0% Unit variable cost $22. 00 Total expenses $8, 000 Owner’s salary $18, 000 Investment $20, 000 State and federal taxes 50% Net Sales (P x Q) $50, 000 Less: COGS 22, 000 (Q x UVC) Gross Margin $28, 000 Less: total expenses 8, 000 Less: owner’s salary 18, 000 Net profit before taxes $ 2, 000 Less: taxes 1, 000 Net profit after taxes $ 1, 000 Investment $20, 000 1, 200 +10% $24. 20 Same $ 64, 800 29, 040 1, 100 +10% $24. 20 Same $59, 400 26, 620 1, 100 +20% $26. 40 Same $63, 800 29, 040 1, 000 +20% $26. 40 Same $58, 000 26, 400 $ 35, 760 8, 000 18, 000 $ 9, 760 4, 880 $20, 000 32, 780 8, 000 18, 000 $6, 780 3, 390 $ 20, 000 $ 34, 760 8, 000 18, 000 $8, 760 4, 380 $20, 000 $31, 600 8, 000 18, 000 $5, 600 2, 800 $20, 000 24. 4% 17. 0% 21. 9% 14. 0% Units Sold (Q) Spreadsheet simulation results Return on Investment MARKETING, 6/e BERKOWITZ 5% KERIN HARTLEY RUDELIUS SIMULATION B C Irwin/Mc. Graw-Hill D © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -FF Competition-Oriented Pricing Approaches Competition-Oriented Approaches include: • customary pricing • above-, PP 15 -FF Competition-Oriented Pricing Approaches Competition-Oriented Approaches include: • customary pricing • above-, at-, or belowmarket pricing • loss leader pricing MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -GG Concept Check 1. What is standard markup pricing? 2. What profit-based PP 15 -GG Concept Check 1. What is standard markup pricing? 2. What profit-based pricing approach should a manager use if he or she wants to reflect the percentage of the firm’s resources used in obtaining the profit? 3. What is the purpose of loss-leader pricing when used by a retail firm? MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -HH One-Price versus Flexible-price Policies • One-Price Policy: setting the same price PP 15 -HH One-Price versus Flexible-price Policies • One-Price Policy: setting the same price for similar customers who buy the same product and quantities under the same circumstances. An example would be Saturn’s “no hassle-one price” policy for new and used cars. • Flexible-Price Policy: offering the same product and quantities to similar customers but at different prices. Car dealers have traditionally (and still do) used flexible pricing in getting to the final sale price. MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -5 The Power of Marginal Analysis in real-world decisions Suppose the owner PP 15 -5 The Power of Marginal Analysis in real-world decisions Suppose the owner of a picture framing store is considering buying a series of magazine ads to reach her up-scale market. The cost of the ads is $1, 000, the average price of a framed picture is $50, and the unit variable cost(materials plus labor) is $30. This is a direct application of marginal analysis that an astute manager uses to estimate the incremental revenue or incremental number of units that must be obtained to at least cover the incremental cost. In this example, the number of extra picture frames that must be sold is obtained as follows: Extra fixed cost Incremental number of frames = Price - Unit variable cost $1, 000 of advertising = = MARKETING, 6/e BERKOWITZ KERIN $50 - $30 50 frames HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -6 Three special adjustments to list or quoted price Special adjustments to PP 15 -6 Three special adjustments to list or quoted price Special adjustments to list or quoted price Discounts Quantity cumulative non-cumulative Trade (functional) Cash MARKETING, 6/e Allowances Trade-in Promotional BERKOWITZ KERIN HARTLEY RUDELIUS Geographical adjustments FOB origin pricing Delivered pricing Single zone pricing Multiple zone pricing FOB with freightallowed pricing Basing-point pricing Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15– 7 The Structure of Trade Discounts Manufacturer’s suggested (minus) list Price ($ PP 15– 7 The Structure of Trade Discounts Manufacturer’s suggested (minus) list Price ($ 30. 00) $100. 00 Retailer’s cost or wholesaler sales price Wholesaler cost Jobber cost or or jobber manufacturer’s (minus) sales price sale price ($ 7. 00) $ 70. 00 ($ 3. 15) $ 63. 00 $ 59. 15 Retail discount: Wholesaler’s discount: Jobber discount: 30% of manufacturer’s suggested price 10% of wholesaler’s sales price 5% of jobber sales price MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15–C Example of basing-point pricing reig ht ht eig $30 f Los Angeles PP 15–C Example of basing-point pricing reig ht ht eig $30 f Los Angeles customer pays $120 MARKETING, 6/e $1 0 fr Seattle customer pays $130 eig $20 fr BERKOWITZ ht KERIN Chicago customer pays $110 St. Louis plant is “basing-point” $100 base price HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15– 8 Pricing practices affected by legal restrictions Consumer Goods Pricing Act Sherman PP 15– 8 Pricing practices affected by legal restrictions Consumer Goods Pricing Act Sherman Act Horizontal price fixing Federal Trade Commission Act Predatory pricing Vertical price fixing MARKETING, 6/e Robinson-Patman Act Geographical pricing Price discrimination Deceptive pricing BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000

PP 15 -II Concept Check 1. 2. 3. Why would a seller choose a PP 15 -II Concept Check 1. 2. 3. Why would a seller choose a flexible-price policy over a one-price policy? If a firm wished to encourage repeat purchases by a buyer throughout the year, would a cumulative or non-cumulative quantity discount be a better strategy. What pricing practices are covered by Sherman Act? MARKETING, 6/e BERKOWITZ KERIN HARTLEY RUDELIUS Irwin/Mc. Graw-Hill © The Mc. Graw-Hill Companies, Inc. , 2000