Pricing Topics

• cognitive bias
• product combinations
• snack cake
• excessive reliance
• quality relationship
• demand situation
• consumer surplus
• sales campaign
• 4ps
• complex products
• price quality
• pricing strategy
• product promotion
• customer product
• three aspects
• automated systems
• economic terms
• twinkies
• low quality
• aversion

Related Images

Source

Source

del.icio.us Tags

• marketing
• wiki
• business
• toread
• economics
• pricing
• read
• moonshine
• ceny
• markrting
• pricing.strategy
• marketing-strategy
• lim
• wikipedia
• avalon
• bookmarksmenu
• imported
• bpm

Pricing, Pricing

The other three aspects are product, promotion, and place. It is also a key variable in microeconomic price allocation theory.Price is the only revenue generating element amongst the 4ps, the rest being cost centers.Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors.

In economic terms, it is a price that shifts most of the consumer surplus to the producer. A good pricing strategy would be the one which could balance between the price floor (the price below which the organization ends up in losses) and the price ceiling (the price beyond which the organization experiences a no demand situation).

Pricing factors are manufacturing cost, market place, competition, maket condition, Quality of product.

The belief in this relationship is most important with complex products that are hard to test, and experiential products that cannot be tested until used (such as most services). The greater the uncertainty surrounding a product, the more consumers depend on the price/quality hypothesis and the more of a premium they are prepared to pay. The classic example of this is the pricing of the snack cake Twinkies, which were perceived as low quality when the price was lowered. Note, however, that excessive reliance on the price/quantity relationship by consumers may lead to the raising of prices on all products and services, even those of low quality, which in turn causes the price/quality relationship to no longer apply.

More technically, this form of pricing exploits the general cognitive bias of aversion to extremes.

It is a type of market customization that deals with pricing of customer/product combinations at the store or individual level.

Source: Wikipedia > Pricing