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12-1Objectives12-2Objectives12-3Case Study12-4Pricing Products12-5Pricing Strategies12-6Market Skimming12-7Market SkimmingMany are predicting a firesale in laptops as supply exceeds demand.Copyright:iS12-8Market SkimmingSony Ad.for camcorders12-912-10VersionEstimated CostiPhone 1$245.83iPhone 3G$174.33iPhone 3GS$178.96iPhone 4$181.55iPad$246.4512-1112-12Besides the flash memory,the most significant material costs are related to new iPhone features:Retina display($26),Apples new microprocessor($19.50),and back glass housing($13).This chart also provides excellent information for those who follow the strategy of buying companies that supply iPhone components.If the cost actually was around$180,then the margin would be around 72%.Image Source:Mobile Magazine12-13I have a strong accounting background so I am very familiar with the product costs that should be included.As you may be aware,cost of goods sold includes direct materials,direct labor,and manufacturing overhead.I mention that software and other costs are not included because they are very difficult to estimate.12-14New Product Pricing Strategies12-15Penetration Pricing12-16New Product Pricing Strategies12-17Penetration Pricing1979 Sony Walkman12-18New Product Intro StrategiesINTENTFOCUSRESULTSKIMMING PENETRATION12-19PRICEPRICEPRICESkimming PenetrationPenetration Price StrategySkimming Price Strategy12-20Which pricing strategy (skimming or penetration)is normally used when a new prescription drug is introduced in the U.S.?Why?12-21Product-Based Pricing ApproachesSetting price steps between product line itemsi.e.$299,$399Pricing optional or accessory products sold with the main product*i.e.car optionsPricing products that must be used with the main Product*i.e.Razor Blades,Film,SoftwarePricing low-value by-products to get rid of them*i.e.Lumber Mills,ZoosPricing bundles Of products sold together*i.e.season tickets,computer makers12-22Product Mix-Pricing Strategies:Product Line Pricing12-23Product Line Pricing12-24Product Mix-Pricing Strategies12-25Optional-Product Pricing12-26Captive-Product Pricing12-27Product Mix-Pricing Strategies12-28Product Bundle Pricing12-29Question12-30Discount and Allowance Pricing12-31Psychological Pricing12-32Psychological PricingValue$22.00Sale$14.9912-33Psychological Pricing12-34Special-Event PricingCash RebatesLow-Interest FinancingLonger WarrantiesFree MerchandiseDiscountsLoss LeadersTemporarily Pricing Products Below List Price to Increase Short-Term Sales Through:Promotional Pricing
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