11.09.2016

PBL task 2 Pricing

• Kotler, P. & Armstrong, G. 2014. Principles of Marketing. Pearson Education. Upper Saddle River.
• Wood, M. B. 2008. The marketing plan A handbook / Marian Burk Wood. Pearson Prentice Hall, Cop. Upper Saddle River.
• Donnelly, R. & Linton, C. 2009. Delivering Customer Value through Marketing. Elsevier Ltd. Oxford.
• Meldrum, M. & McDonald, M. 2007. Marketing in a nutshell. Elsevier Ltd. Oxford.

Whether planning for domestic or international marketing. all companies need to com ply with a variety of pricing laws and regulations. Some of these include: e No price collusion. In the United States, the European Union, and many other areas, competing firms are not allowed to collaborate in setting prices and cannot take other pricing actions that reduce competition. No minimum retail price. In the United States, United Kingdom, and some other countries, companies are not permitted to enforce a minimum retail price among channel members(although in some cases, a"suggested" retail price may appear on the package or price tag) No price discrimination. In the United States, a company usually cannot charge different prices for essentially the same product at the same time in the same market unless the lower price(s) are available through discounts or allowances that are open to all. However, there are exceptions; for example different prices may be allowed if the company has different costs, is responding to competition, or is clearing outdated merchandise.

No predatory The United States outlaws the aggressive u of low pricing. pricing to damage a competitor or reduce competition Price limius. Some nations set an upper limit on the price that can be charged for certain products, as Canada does with prescription drugs. Apart from applicable laws and regulations. marketers must make decisions about ethic dilemmas in pricing. Is it ethical for a company to raise prices during an ting s with emergency, when products may be scarce or especially valuable? Should a company set a high price for an indispensable product knowing that certain customers will be unable to pay? What are a company's ethical responsibilities regarding full disclosure of prices for upkeep, updates, or replacement parts? How far in advance should customers be notified of planned price increases, and what form should notification take? The chief information officer of Hyundai Motor America has complained about technology companies that attempt to"slip in surprise increases for maintenance, licensing, or other services. As difficult as the ethical aspects of pricing may be, "21 marketers must carefully think through the consequences on customer relationships and company image Internal Pricing Influences Within the organization, costs and break-even are critical influences on pricing Target ing and positioning strategy, product strategy, and other marketing decisions must also be factored into pricing plans.

planning pricing decisions
When planning pricing, marketers nrst must determine what s strategy intended to achieve, given the marketing, financial, and socielal objectives they bav also need to invesligare the various external innuences com nel members legal regulatory and ethical concerns) and internal influenc reak-even: Largeting and positioning strateg. Product strategy and other mar decisions that can affect pricing decisions Pricing objectives Because a product's price is lhe organization's source of revenue, marketers should establish specific objectives(or all pricing decisions These objectives must be consis tenl with each other and with the overall mission, direction, goals, and marketing plan objectives Due to market realities, organizalions may have to trade off one pricing objective for another. Rarely can a company boosl profitability while simultaneously raising its market share lo a much higher level, for example. This is why American Airlines, among other carriers has switched from pricing for market share to pricing for profilability, cutting routes and nights that fail lo meet profitabilily objectives Verizon Wireless one of the largest US cell phone carriers, is using pricing lar customer relention as well as for financial objectives.



http://www.knowthis.com/pricing-decisions/factors-affecting-pricing-decision

Internal Factors - When setting price, marketers must take into consideration several factors which are the result of company decisions and actions. To a large extent these factors are controllable by the company and, if necessary, can be altered. However, while the organization may have control over these factors making a quick change is not always realistic. For instance, product pricing may depend heavily on the productivity of a manufacturing facility (e.g., how much can be produced within a certain period of time). The marketer knows that increasing productivity can reduce the cost of producing each product and thus allow the marketer to potentially lower the product’s price. But increasing productivity may require major changes at the manufacturing facility that will take time (not to mention be costly) and will not translate into lower price products for a considerable period of time.

• External Factors - There are a number of influencing factors which are not controlled by the company but will impact pricing decisions. Understanding these factors requires the marketer conduct research to monitor what is happening in each market the company serves since the effect of these factors can vary by market.