PRICE_MAGTUBA_MBA15

[Audio] Hello classmates! I am Jessa of MBA 15 and today, I will be presenting about the topic, Price. Within the dynamic sphere of marketing management, wherein strategies are meticulously devised to captivate hearts, minds and markets, the factor of price emerges as a pivotal player that traverses the landscape of consumer behavior, competition dynamics and brand perception. This report discusses how price and pricing decisions impact the ever-evolving landscape of business..

[Audio] I will discuss the definition of Price, the Environmental Influences on Pricing, Pricing Objectives, Pricing Strategies, and Pricing Methods..

[Audio] Price's definition varies as to who you are going to ask. Price, from the standpoint of the seller, is the sum of money received in exchange for a good or service. For a company, it's a means to pay bills and turn a profit. In terms of economics, the price is the point at which the supply and demand curves converge. From a more global standpoint, price is a means of communicating the value society sets on various goods and services..

[Audio] In contrast, a buyer's definition of price is what they are willing to forego or give up in exchange for a given set of benefits. Price is, in essence, the sum of the money spent plus the time and emotional costs incurred to receive a good or service..

[Audio] Influences from the environment play a pivotal role in shaping pricing strategies within the business landscape. Environmental influences on pricing can either be internal or external. Internal influences on pricing include the following: company's cost, existing product line, and product life cycle. Meanwhile, external influences encompass competition, consumers, distribution intermediaries, economic environment, governments, and legal environment..

[Audio] Pricing objectives are the deliberate and strategic aims that influence a company's approach to pricing its products or services. These objectives serve as critical benchmarks, defining an organization's pricing strategy and strategies. They reflect the company's overarching goals and are intended to align with broader business objectives. The following are common pricing objectives: Profit-oriented objective: This aims at maximizing the overall profit of a company. The main goal is to make as much money as possible, therefore figuring out the best price to charge for the products or services so that more profit can be generated after covering all the costs. In simpler words, the profit-oriented price objective means finding the right price to make the most money for the business while keeping everything in balance. Competition-oriented objective: This is all about looking at what other companies are doing and figuring out how to set your prices based on that. This means paying attention to what the competitors are charging and trying to find a price that's kind of like theirs. It's staying in a similar range so that prices make sense to customers while still making profit. Sales-oriented objective: This is about selling products and making customers happy and satisfied. A sales-oriented objective means you're focusing on getting more customers to buy your products or engage in your services by, for example, offering discounts or attractive deals. This objective is closely related to the idea that by offering lower prices or special deals, more customers will be interested in buying, which can lead to a higher overall number of sales. Customer Perception-Related Objective: This involves pricing according to how customers see the prices of your products or services. A customer perception-related objective, then, indicates that you're attempting to make customers believe they're receiving a good deal or a high-quality product by employing specific prices. You're employing psychology to persuade consumers to like your prices and offerings. Companies do this to make customers happy and want to buy more. For example, two shoe options are being sold: Shoe A: It's priced at P500.00 Shoe B: It's priced at P499.99 Even though the price difference between the two shoes is only one cent, the customer may believe Shoe B is a better buy. This is due to consumer perception. Even if the price difference is negligible, P499.99 appears substantially lower than P500.00 to the customer's brain. This is a frequent company tactic for making their prices appear more tempting to clients. They understand that the customers' minds frequently focus on the price's left digits and round down. So, even if it's a minor variation, it can have a significant impact on how the customers perceive the pricing and their readiness to purchase. Intermediary-Related Objective: This means working well with the middle people who help get products from the company to the customers. This means figuring out a price that's good both for the company and the middle people involved in getting the products to the customers. This helps keep everyone happy and the products move smoothly from the factory to the stores..

[Audio] Pricing strategies encompass a range of deliberate approaches that businesses employ to set prices for their products or services. These strategies are formulated in alignment with the company's pricing objectives and are aimed at achieving specific outcomes within the market. Here are several key pricing strategies: Pricing Strategies Determined by Competitive Pressure Price Leadership Strategy - This strategy consists of adjusting a price and expecting the competitors to follow suit Competitive parity strategy - This strategy consists of setting the same price as the market average or the leader. Low-cost pricing strategy - This strategy involves systematically offering the lowest price on the market. Pricing Strategy Dictated by Consumer Preferences Prestige or quality signalling pricing strategy - This strategy consists of setting a price that will project the desired image of the product to consumers. Pricing Strategies Based on Business Costs Cost-plus pricing strategy - This strategy consists of setting a product price that lets the company achieve a predetermined profit margin. Pricing Strategies for a Product Line Complementary product pricing strategy - This strategy consists of selling the central product at a low price, while complementary goods are sold at a higher price. Price bundling strategy - This strategy consists of offering a product with a group of items that is sold at a lower price than the sum of all products at their regular cost. Customer value pricing strategy - This strategy consists of pricing a product very competitively, but offering fewer options than other products in the line. Price and Product Life Cycle Skimming strategy - This strategy consists of setting a high initial price that is later lowered. Penetration strategy - This strategy consists of setting an initial low price. Price reduction strategy or promotional pricing - refers to the deliberate and temporary lowering of the selling price for a product or service as part of a marketing campaign or promotional effort. The primary objective of this strategy is to stimulate demand, attract customers, boost sales, and potentially clear excess inventory. Promotional pricing is often employed for a specific period, during events, holidays, or in response to competitive pressures..

[Audio] Pricing methods describe the methodical techniques used by firms to establish the precise costs of their goods and services. These methods are based on various factors such as costs, market conditions, competition, customer perception, and overall business objectives. Different pricing methods offer distinct advantages and are chosen based on the company's specific circumstances and goals. Here are some common pricing methods: Cost-Based Method: The cost-based method in pricing is like setting the price for something by thinking how much it costs to make or provide. It means adding up all the costs and then deciding how much profit you want to make. Competition-Based Method: The competition-based method in pricing is like looking at what the competitors are charging for similar products and then deciding your price based on that. Demand-based Method: The demand-based method is setting the price of your product based on how much the customers really want it. So, with the demand-based method, you're looking at how much people want what you're selling. If they want it a lot, you might decide to charge a bit more. But if they don't want it that much, you might set a lower price so more people will be interested. It's like figuring out how much the customers are excited about your product and then choosing a price that matches their excitement level. Customer-Based Method: The customer-based method in pricing is all about setting the price based on what customers are willing and happy to pay. With the customer-based method, you're listening to what your customers want and how much they're willing to spend. You don't want to charge too much and make them unhappy, but you also want to make sure you're getting paid fairly for your hard work. It's understanding customers' preferences and budgets and then picking a price that matches what they value and can afford..

[Audio] In conclusion, price is the strategic tool that connects and keeps the relationship between consumers and businesses, as well as the influencing factor for consumer behavior and brand perception. Marketing managers must know how to navigate this tool that not only impacts the company's financial health (i.e. profitability and financial performance) but also shapes the narrative of brands in the minds of consumers. That would be all. Thank you and have a good day!.