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Sales & Marketing introduction - Session 3


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Sales & Marketing introduction - Session 3

  1. 1. 3 rd Session
  2. 2. Importance of pricing <ul><li>Indicator for perceived value </li></ul><ul><li>Marketing determinant </li></ul><ul><li>Economic determinant (Demand & Supply) </li></ul>
  3. 3. Steps of pricing
  4. 4. 1. Identify pricing constraints and objectives
  5. 5. Pricing objectives <ul><li>Sales objectives </li></ul><ul><li>Market share objectives </li></ul><ul><li>Unit volume objective </li></ul><ul><li>Survival objective </li></ul><ul><li>Social objectives </li></ul><ul><li>Profit objectives </li></ul>
  6. 6. 2. Estimate demand and Revenue <ul><li>Demand curve </li></ul><ul><li>Curve shifting </li></ul><ul><li>Price Elasticity on demand </li></ul>
  7. 7. 3. Determine cost, volume and profit relationships <ul><li>Fixed cost, Variable cost, Total cost </li></ul><ul><li>Break-even analysis </li></ul><ul><li>Profit calculation </li></ul>
  8. 8. 4. Select approximate price level <ul><li>Customary </li></ul><ul><li>Above/ Below </li></ul><ul><li>Loss leader </li></ul><ul><li>Target profit </li></ul><ul><li>Return on sale </li></ul><ul><li>ROI </li></ul><ul><li>Mark-up </li></ul><ul><li>Cost-plus </li></ul><ul><li>Experience curve </li></ul><ul><li>Skimming </li></ul><ul><li>Penetration </li></ul><ul><li>Prestige </li></ul><ul><li>Lining </li></ul><ul><li>Odd-even </li></ul><ul><li>Target </li></ul><ul><li>Bundle </li></ul><ul><li>Yield mgmt </li></ul>Competition oriented Profit oriented Cost oriented Demand oriented
  9. 9. 5. Set list of quoted price <ul><li>One-price versus flexible-price </li></ul><ul><li>Trading marginal-revenue against marginal-profit </li></ul><ul><li>Customer effect </li></ul><ul><li>Competitive effect </li></ul>
  10. 10. 6. Make final adjustments <ul><li>Discounts </li></ul><ul><li>Allowances </li></ul><ul><li>Geographical adjustments </li></ul>