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Pricing Strategies;Objectives;Objectives;Price is #1 factor influencing choice of cellular companies
Prices in wireless industry dropped 25% in three years
Few companies were profitable;Definitions;Product Line Pricing
Setting price steps between product line items.
Price points
Optional-Product Pricing
Pricing optional or accessory products sold with the main product;Captive-Product Pricing
Pricing products that must be used with the main product
High margins are often set for supplies
Services: two-part pricing strategy
Fixed fee plus a variable usage rate;By-Product Pricing
Pricing low-value by-products to get rid of them
Product Bundle Pricing
Pricing bundles of products sold together;Price Adjustment Strategies;Price Adjustment Strategies;Conditions Necessary for Segmented Pricing Effectiveness ;Price Adjustment Strategies;Price Adjustment Strategies;Promotional Pricing Problems ;Price Adjustment Strategies;Price Adjustment Strategies;Initiating Price Cuts is Desirable When a Firm:
Has excess capacity
Faces falling market share due to price competition
Desires to be a market share leader;Price Increases are Desirable:
If a firm can increase profit, faces cost inflation, or faces greater demand than can be supplied.
Methods of Increasing Price
Alternatives to Increasing Price
Reducing product size, using less expensive materials, unbundling the product.
;Buyer reactions to price changes must be considered.
Competitors are more likely to react to price changes under certain conditions.
Number of firms is small
Product is uniform
Buyers are well informed
;Respond To Price Changes Only If:
Market share / profits will be negatively affected if nothing is changed.
Effective action can be taken:
Reducing price
Raising perceived quality
Improving quality and increasing price
Launching low-price “fighting brand”
;Pricing within Channel Levels
Price-fixing
Competitors can not work with each other to set prices
Predatory pricing
Firms may not sell below cost
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