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Price Adjustment Strategies

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Taylor Bockelman

on 18 February 2010

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Transcript of Price Adjustment Strategies

Product Mix Strategies Price Lining Apple iPod Touch -- $229
-- $299


-- $399 Optional Product Captive Product Bundle pricing + Segmented Pricing Strategies Buyer Identification --$1,500,000

--$2,000,000 + + For $299.99! For $99.99! For $149.99! $79.99 $69.99 $149.99 $19.99 Product Design $19.99 $49.99 $99.99 $149.99 $199.99 Purchase Location -------- -------- $9.99 -------- $14.99 $49.99 -------- $89.99 Time of Purchase During Christmas After Christmas -$4.99 a shirt -$9.99 a shirt During Business Hours After Business Hours -Long distance call: $0.99 a minute -Long distance Call: $0.25 a minute Psychological Pricing Strategies Odd-Even Pricing An odd-even pricing strategy means that the price will either always end in an odd or even number. A number ending in an odd integar seems like a bargain to the buyer, while an even number makes the deal seem like a quality deal. $10.00 $89.95 Prestige Pricing Prestige Pricing sets higher-than-average prices to suggest status and high quality to the consumer. $299.99 Multiple-Unit Pricing -Three for $19.99 $6.99 $1.99 -Five for $5.00 EDLP Every Day Low Prices (EDLP) are low prices set on a consistant basis with no intention of raising them or offering discounts in the future. $0.99 $1.99 Promotional Pricing Promotional Pricing is generally used in conjunction with sales promotions where prices are reduced for a short period of time. Loss Leader Pricing Loss Leader Pricing is used to increase store traffic by offering very popular items for below-cost prices. $1299.99 $149.99 Special Event In Special Event pricing, items are reduced in price for a short peiod of time. $39.99 during the holidays!
$0.99 on Easter Rebates and Coupons Rebates are partial funds provided by the manufacturer to the customers. Coupons allow customers to take reductions at the time of purchase. Coupon Rebates Discounts and Allowances Cash Discounts Pay with cash and save 5%
Quantity Discounts Buy 10 and take 20% off! $19.99 for 1000 Trade Discounts Trade discounts are not really discounts at all but rather the way manufacturers quote prices to wholesalers and retailers. Donut Factory Donut Factory Website - Website Creater gets 25% off ALL purchases for creating the website instead of taking payment Seasonal Discounts Seasonal Discounts are offered to buyers willing to buy at a time outside the customary buying season. Allowances Trade-in allowances go directly to the buyer. Customers are offered a price reduction if they sell back an old model of the product they are purchasing. $4,999.00 if you turn in an old car. Prices vary on condition of old car. ^^^
You probably won't get much of a discount for this. Optional Product pricing involves setting prices for accessories or options sold with the main product. for $599.99 (with carrying case) for $19,500 with accessories! Captive Product pricing sets the price for one product low but compensates for that low price by pricing the supplies for that product high. Purchase Location involves setting pricing according to where a product is sold and/or the location of the good or service. Prices may vary depending on where they are sold. Some businesses have found that pricing items in multiples, such as three for $1.00, is better than selling the same items at $0.34 each. $4.99 during the winter By-Product Loss Leader pricing is used to increase store traffic by offering very popular items of merchandise for sale at below-cost prices. After buying this item, buyers are attracted to the merchandise and will buy things at regular price in addition to the loss leader merchandise. $400,000.00 (He just bought a PS3 and likes the low price so he's adding a 55" LCD to his cart) Price Adjustment Strategies
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