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Edit Comment Close Premium member Presentation Transcript Slide 1: PRICING DECISIONS PRESENTED BY: Gaurav Bhandari (07BS1412) Mayur Gangwal (07BS2222) Mohit Khajanchi (07BS2295) Priyank Raj (07BS3024) Suruchi Kothari (07BS4467) What is Price? : What is Price? Features of pricePricing is one of the most important element of Marketing Mix which generates revenue for the organization : Features of pricePricing is one of the most important element of Marketing Mix which generates revenue for the organization Marketing Objectives : Marketing Objectives Other pricing objectives Survival Current profit maximization Market share leadership Product quality leadership Not- for- profit objectives Partial or full cost recovery Social pricing Market positioning influences pricing strategy Types of PRICING : Types of PRICING Cost- Based Pricing : Break-Even Analysis Target Profit Pricing Value- Based Pricing Competition- Based Pricing PRICING STRAGIES OBJECTIVES : PRICING STRAGIES OBJECTIVES Learn the major strategies for pricing imitative and new products. Understand how companies find a set of prices that maximizes the profits from the total product mix. Learn how companies adjust their prices to take into account different types of customers and situations. Know the key issues related to initiating and responding to price changes. DIFFERENT PRICING STRATEGIES : DIFFERENT PRICING STRATEGIES Market- Skimming Pricing Market- Penetration Pricing Product Line Pricing Optional- Product Pricing Captive- Product Pricing By- Product Pricing Product Bundle Pricing PRICE ADJUSTMENT STRATEGY : PRICE ADJUSTMENT STRATEGY Discount Cash discount Quantity discount Trade discount Seasonal discount Allowances Trade- in allowances Promotional allowances Slide 10: Segmented Types of segmented pricing strategies: Customer- segment Product – form pricing Location pricing Time pricing Also called revenue or yield management Certain conditions must exist for segmented pricing to be effective Slide 11: Psychological The price is used to say something about the product Price- quality relationship Reference prices Differences as small as five rupees can be important Numeric digits may have symbolic and visual qualities Slide 12: International Prices charged in a specific country depend on many factors Economic conditions Competitive situation Laws / regulations Distribution system Consumer perceptions Cost considerations Slide 13: Promotional Temporarily pricing products below the list price or even below cost price Loss leaders Special- event pricing Cash rebates Low- interest financing, longer warranties, free maintenance Promotional pricing can have adverse effects Slide 14: Geographical Types of geographic pricing strategies FOB- origin pricing Uniform- delivered pricing Zone pricing Basing- point pricing Freight- absorption pricing Slide 15: Effective action can be taken Reducing price Raising perceived quality Improving quality and increasing price Predatory pricing ABOUT PARLE - G : ABOUT PARLE - G Established in 1929 1st brands – Parle Glucose and Parle Monaco Multimillion US $ company Market leader in many products Won acclaim at the Monde selection since 1970 40% share of the total biscuit market 15% share of the total confectionery market Continue……………. : Continue……………. 14 manufacturing units for biscuits & 5 manufacturing units for confectioneries Parle has largest such manufacturing units in India Total turnover 2000 crores It has provided its products to the mass with the affordable range. Pricing Strategy of Parle-G : Pricing Strategy of Parle-G First Question crops up How Parle-G maintained its price of Rs.4.00 for the last 12 yrs????????????? Slide 20: There are many ways to price a product. Let's have a look at some of them and try to understand the best policy/strategy in various situations. Slide 21: Parle brand symbolizes – quality, health and great taste Factories at strategic locations Automatic printing and packaging facilities Extensive distribution network build over the years is a major strength Slide 22: 140-180 packets/minute 12000 biscuits/minute Bulk purchase of wheat Reduces the no. of shift Wastage- 1% of the 115 tones Slide 23: Establishment of manufacturing units in rural areas Investment in R&D Increase in number of biscuits and decrease in weight per biscuit 100g pack costing Rs 4 has net weight of 93.5g PARLE-G PRICING STRATEGIES : PARLE-G PRICING STRATEGIES Sell brand not price Wider reach/presence through different medium-education, hospital, army, railways & bus, donations, sports, NGOs Brand value compels suppliers to sell Parle-G at low commissions Nearly1500 wholesalers, catering to 425000 retail outlets directly or indirectly Availability in remote places even in the villages having population of 1500 Continue……………… : Continue……………… Now available in Re 1,Rs 2, Rs 4 to Rs 25 packet Profit margin for distributors is 4% and for retailers is 10-12% Pricing advantage of Parle brand in other products Continue………………………. : Continue………………………. Penetration Strategy -- keeping high quality and maintains low price. Previously sets its price as per the geography, freight cost for reaching remote places is quite high. As per the G’dsouza, Coordinator of Parle products, variation of the price of Parle-G from Rs.4-5 in different states. But due to factories at strategic locations Parle-G is moving towards Uniform Pricing all over the INDIA. Continue…………………. : Continue…………………. Alternatives to Increasing Price Reducing product size, using less expensive materials, unbundling the product Buyer reactions to price changes must be considered Slide 28: Competitors are more likely to react to price changes under certain conditions Number of firms is small ( Britannia, ITC, Priya Gold and other small players) Product is uniform Buyers are well informed Parle-G has seen the variation in sales due to increase in price by mere 50 paise. Respond To Price Changes Only If Market share / profits will be negatively affected if nothing is changed Slide 29: HAVE PARLE-G WITH COLD WATER HAVE PARLE-G WITH CHILLED WATER You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.