Some examples of pricing decisions to be made include:
* Pricing strategy (skim, penetration, etc.)
* Suggested retail price
* Volume discounts and wholesale pricing
* Cash and early payment discounts
* Seasonal pricing
* Bundling
* Price flexibility
* Price discrimination

<<image "/static/files/MBI/Module%206/pricingrange.PNG width:600>>

Frequent mistakes are determining prices [[Mark-up pricing]] and [[Competitive match pricing]].

Which price maximizes long-term profits?
* Customer perceived benefits and price elasticity
* Competition (now and later)
* Business model
* Psychological effect
* Segmentation and positioning

Value creation per unit looks like this:
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<img src="/static/files/MBI/Module%206/ValueCreation.PNG" width=400>
</html>

Tests to determine price elasticity:
|Method|Advantages|Disadvantages|h
|Price experiments|* Fast<br>* Low risk <br>* Many variants can be tested|* External validity (transfer?) <br>* Internal validity (too strong simplification|
|Classic market tests|* Realistics <br>* Allows for good predictions|* Reaction to heterogeneous prices? <br> * Positioning jeopardized? <br>* High cost / time|
|Tests over the internet|* Realistic <br>* Very fast <br>* Limited cost and time|* Reaction to heterogenous prices? <br>* "Unfair"? (Amazon) <br>* Long range effects? <br> * Not suitable for all distribution channel|
Part of [[Marketing mix (Four P's of marketing)]]
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mbi_public
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Sun, 12 Dec 2010 11:50:04 GMT
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dirkjan
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Sun, 12 Dec 2010 11:50:04 GMT
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dirkjan
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dirkjan