This Pricing Strategies document provides extensive information for a company to
develop an optimal pricing strategy. A well-devised pricing structure will earn the
company profit and reflect the realities of the marketplace. Some of the topics covered
in this document include: how to improve performance, what pricing should do,
questions associated with pricing, and The 9 Laws of Pricing Sensitivity. This document
is a useful tool for any company that provides services or sells products, and wants
information for devising a pricing strategy.
Pricing Strategies for Marketing
Pricing Strategies
For Marketing
2010
Table of Contents
Executive Summary......................................................................................................................... 4
Learn How to Improve Performance .............................................................................................. 5
The Breakeven Analysis ............................................................................................................... 6
What Pricing Should Do .................................................................................................................. 8
Pricing Strategies ............................................................................................................................ 9
Questions Associated with Pricing ................................................................................................ 13
The 9 Laws of Pricing Sensitivity ................................................................................................... 16
Pricing Definitions ......................................................................................................................... 18
Common Pricing Mistakes ......................................................................................................... 21
Pricing Tactics ............................................................................................................................ 21
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Executive Summary
P
ricing is one of the most important ingredients of the marketing blend. It is the only
ingredient that produces a turnover for the company. Many companies do not view
their pricing strategies as a part of their overall marketing strategy. Because pricing
strategies have a profound impact on a company’s overall profit margin, they should be given
the same consideration as the promotion and advertising strategies. A price that is higher or
lower can dramatically alter gross margins and sales volumes, which indirectly affects other
expenses like reducing storage costs, or establishing opportunities for volume discounts with
suppliers. The four “P’s” of marketing are:
1. Pricing 2. Product
3. Promotion 4. Place
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