One, 2020/8/1, one, chapter xii, pricing strategy, 2020/8/1, 2, 2020/8/1, 3, leading cases: price battles in the chinese market, opened on 8 november 2002 in guangzhou and opened a price war with the supermarket of hua wancah, which shocked the then ncpc. Procter products into the altar, introducing in 2003 a $9. 9-dollar 200-ml bottle of soft shampoo water to fight against home-grown producers. The characteristics of price wars in the chinese market: price wars spread across a wide spectrum; diversification of price reduction competition (a variety of sponsors' positions and diversification of the objective of price reduction competition); consumer reaction to price reductions; the coexistence of virulent and benign competition; and the proliferation of blind spots and faulty areas in price strategies. Section ii. General approach to pricing
2. Structural tips, 2020/8/1,5, learning goals, identifying factors that affect product pricing. Knowledge of basic pricing procedures and mastery of the main methods of cost orientation, demand orientation and competition-led pricing. Learn to apply pricing strategies flexibly. Learn to use price adjustment instruments correctly, predict customer and competitor responses after price changes and prepare for response in advance. 2020/8/1, 6, sect. I factors affecting pricing, i, pricing objectives ii, product costs iii, market demand iv, competition status, 2020/8/1, 7, product pricing and impact factors, 2020/8/1, 8, i, pricing objectives, maximizing profits in the period of survival maximizing market ownership optimizing product quality 2020/8/1, 9, 1, survival, income costs, quantity, fixed costs, convertibility, profits, sales, costs, 2020/8/1
3, 0,2, maximize current profits, assuming q is demand; n is demand potential; p is price; e is the rate at which demand changes with price changes (often negative), the demand function can be expressed as q=n+ep assumes c is total cost; f is a fixed cost; v is a unit variable; and q is a cost function for production of the same amount of demand, as follows: c=f+vq assumes r as sales revenue; z is a profit, with z= r-c=pq-c=(n+ep) p-(f+vq)=(n+ep) p-(f+v(n+ep), 2020/8/1, 11, 2020/8/1, 12,3 with a maximum market occupancy rate with low and higher long-term profits. Enterprises can take over market share at low prices if: 1) markets are more price-sensitive 2) production and distribution
4. Low prices could have defeated existing and potential competitors, despite accumulated experience. , total cost operating scale curve, unit cost operating scale curve, cost, size of operation, cost ratio, multiple output increase, 2020/8/1, 15, economies of scale function, in: the y ratio of increased production to the cost before the increase in production is a multiplier of increased production a factor of elasticity (or scale efficiency factor) for the effect of production on manufacturing costs, 2020/8/1,17,4, product quality optimized, bmw without helmets, 2020/8/1,18,2020/8/1,19,iii. Market demand, 1. Demand is the upper limit of pricing. 2. Impact of demand price elasticity on pricing. Demand price elasticity reflects the sensitivity of demand to prices, calculated as the ratio of a change in demand to a change in prices, i. E. Price
One per cent of the changes would result in a few per cent change in demand. Please evaluate this statement. 2020/8/1,21, the impact of demand price elasticity on pricing strategies, and the lack of elasticity of goods, are suitable for price stabilization or appropriate price increases. 2020/8/1,22, the impact of demand price elasticity on pricing strategies,2 and flexible commodities are suitable for appropriate price reductions to increase sales. 2020/8/1, 23, sect. Ii, pricing procedures and methods, i, pricing procedures, ii, pricing methods, 2020/8/1, 24, i, pricing procedures, selection of pricing targets, measurement of demand price elasticity, estimation of costs, analysis of competitors, selection of pricing methods, determination of final prices, 2020/8/1, 25, ii, pricing methods, (i) cost-oriented pricing methods, (ii) demand-led pricing methods
6 (iii) competition-oriented pricing method, 2020/8/1, 26, (i) cost-oriented pricing method, 1. Cost-plus pricing method. The formula is: () 2. Target cost-pricing, i. E. A method for setting prices based on estimated sales and volumes. 2020/8/1, 27, extrapolation of cost added to the best in pricing methods (1), 2020/8/1, 28, extrapolation of cost added to the best in pricing methods (2), 2020/8/1, 29, 1, types of cost added to pricing methods, 2020/8/1, 30, 2, target cost pricing methods, 2020/8/1, 31, scope of application of target cost pricing methods, small shares, large equipment potential enterprises fixed costs are significant, products have longer market lifetimes, 2020/8/1, 32, (ii) demand-led pricing methods are a form of market demand intensity and consumer-led pricing
7. Pricing methods that feel the main basis. Including: cognitive value pricing, 2020/8/1, 33, 1, cognitive value pricing, 2020/8/1, 34, 2, demand differing, 2020/8/1, 35, assuming that the cost function of a given commodity operated by an enterprise is: also known in two sub-markets, the demand function of the product is: how should the test analysis be priced to maximize profits?, 2020/8/1, 36, (iii) competition-led pricing, followed by a municipal pricing method. Tender pricing. 2020/8/1, 37, sect. Iii basic pricing strategy, i, discount pricing strategy, ii, regional pricing strategy, iv, differential pricing strategy, v, new product pricing strategy, vi, portfolio pricing strategy, case study, 2020/8/1, 38, i, discount pricing strategy
In order to encourage customers to pay their bills early, to purchase large quantities, to buy off seasons and to lower their basic prices as appropriate, such price adjustments are called price discounts. (c) functional discounts; the essence of the regional pricing strategy, 2020/8/1,39,ii, and the regional pricing strategy, is to decide whether to set different or equal prices for a product sold to customers in different regions. Fob origin pricing harmonization of delivery pricing base point pricing freight exemption pricing, 2020/8/1, 40, iii, psychological pricing strategy, prestigious pricing end-number pricing, 2020/8/1, 41, iv, differential pricing strategy, conditions applicable to differential pricing and its main forms differentiation pricing, 2020/8/1, 42, 1, differential pricing and its main forms
9. Differential pricing, also known as price discrimination, refers to the sale of a product or service by an enterprise at a price that does not reflect a proportion of the cost. Customer differential pricing, product-form differential pricing, product sector differential pricing, sales time differential pricing, differential pricing, 2020/8/1, 43, 2, conditions applicable to differential pricing, 1) the market must be disaggregated and different levels of demand in the various subdivisions. 2) it is impossible for a customer who buys a product at a low price to sell it to others at a high price. 3) competing parties are not likely to compete at a lower price in the market where an enterprise sells products at a higher price. 4) the cost of a breakdown of the market and its control cannot exceed the additional income earned as a result of price discrimination. 5) price discrimination does not give rise to displeasure among customers. 6. Price discrimination is not unlawful., 2020/8/1, 44, 5, new
10, product pricing strategy, 2020/8/1,45, vi, product portfolio pricing policy, product-wide pricing, product selection pricing, supplementary product pricing, byproduct series pricing, 2020/8/1, 46, section iv price change response and price adjustment, i, enterprise price reduction and price raise, customer's response to enterprise price change, iii, competing party's response to enterprise price change, iv, enterprise's response to competitors ' price change, 2020/8/1, 47, i, enterprise price reduction and price increase, 2020/8/1, 48, ii, customer's response to business price change, 2020/8/1, 49, iii, competor's response to business price change, and understanding the main route of competition's response. The main assumptions that predict the reaction of competitors. 2020/8/1,50,iv. The response of enterprises to competitors ' price changes, (i) the enterprise response in different market environments, (ii) the response of market leaders
11, (iii) factors to be taken into account in business adaptation, 2020/8/1, 51, (i) business responses in different market settings, where firms are required to reduce prices if the competitor declines. There is more room for firms to respond to competitors ' price changes in the heterogeneity market. 2020/8/1, 52, (ii) the response to price reductions for competitors has been reduced by 2 per cent by introducing coupons that encourage repurchase, by 2 per cent, by half the price of competitors, by more than 4 per cent, to the level of competitors, which seriously undermines our sales, is it a permanent discount? How much did it cost? Did the competitor drop? Maintain current price levels, continue to focus on competitors ' prices, no, yes, no, 2020/8/1, 53, and (iii) the reaction of market leaders to keep prices constant. Price reduction. 2020/8/1, 54, (iv) factors to be taken into account in enterprise adaptation, 1. The stage of the life cycle of the product and its importance in the portfolio of the enterprise's products. 2. Competing intentions and resources. Market sensitivity to prices and values. 4. Changes in cost as production and distribution changes. 2020/8/1,55, this chapter's structural tip, impact price, basic pricing, motor pricing, final prices, pricing methods, application of various pricing strategies,
