Pricing strategy

Question 1

What is a price ?

Answer 1

Price is the amount of money charged for a product or a service.
Is the sum of all the values that a customer gives up to gain the benefits of having or using a product or service.

Question 2

What are the criteria for price determination ?

Answer 2

• Potential consumers
• Demand estimation
• Anticipating competitor prices and reactions
• Market share analysis
• Cost analysis
• Profit calculation

Question 3

What is the formula for price elasticity of demand ?

Answer 3

e = ((Q1-Q0)/Q0)/(P1-P0)/P0

Question 4

what are indicators of customer price sensitivity ?

Answer 4

• product
• price
• buyer

Question 5

What is the criteria for price selection techniques ?

Answer 5

• Break-even point analysis related to market demand
  beakeven point in units = FC/selling price unit - variable cost unit
  breakeven point in sale revenue = FC*selling price unit / selling price unit - variable cost unit
• Markup pricing = price = (100% + required mark up) * cost
  with markup = selling price - cost
• Target pricing
• Psychological pricing

Question 6

What are the different oriented pricing for existing product ?

Answer 6

Building
Holding
Harvest
Repositioning

Question 7

What are the different new product pricing strategies ?

Answer 7

Market-skimming pricing

Market penetration pricing

Question 8

What are the pricing adjustment strategies ?

Answer 8

Discount and allowance pricing 
Segmented pricing 
Psychological pricing 
Promotional pricing 
Geographic pricing 
Dynamic pricing 
International pricing