Product price setting strategy(李晓东周勃潘宏宇).pptVIP

Product Price Setting Stragegy 李晓东 潘宏宇 周勃 符鸣 钱芳 方杰 By definition, the price setting strategy is to make a strategy which can make your company’s products most competitive in the market. What is the price setting strategy? Costs Supply and Demand Price and Non-price Competition Consumer Perception of Price Factors in Pricing Decisions 1 3 2 4 In setting prices for new products, the first things we must take into account is costs. Prices should cover fixed costs—expenses such as insurance, rent and equipment that remain constant regardless of the number of units produced, variable costs—costs such as raw materials and labor which change depending on the number of units produced and marketing costs. Or …… Costs 1 OR The price of a product is influenced by the economic forces of supply and demand. For most products, the quantity demanded goes up as the price goes down; demand goes down as the prices goes up. On the contrary, the quantity supplied increase as the prices goes up; supply goes down as price goes down. So, when setting price, we should look the market situation of supply and demand first. Supply and Demand 2 Case Nowadays, the estate market of China is booming. Supply is less to demand, leading to the high price of housing. Do you think that whether there is a developer who is too fool to decrease the price of his housing? The answer is No. Case Price and Non-price Competition The pricing decision is also influenced by the extent to which firms decide to use price as a competitive tool. Firms competing based on price competition generally set prices equal to or lower than competitor’s prices. They must be prepared to change prices quickly and frequently in response to competitor’s price changes. Like PG, Perfect company which mainly make groceries. 3 Consumer Perception of Price Price may be the top consideration in buying decision of some consumers, while to others it may be much less important. The importance of price varies a great deal of for di