Chapter 18: Setting the Price Right

Chapter 18: Setting the Price Right

The 4 Step Process to Set a Price Right:

1. Establish Pricing Goals
2. Estimate demand, costs, and profits
3. Choose a price strategy to help determine a base price.
4. Fine-tune the base price with pricing tactics.

Price Strategies:

• Price skimming- lowering the price. Price skimming works best when the market is willing to buy the product even though it carries an above-average price.
• Penetration Pricing- charging a relatively low price for a product as a way to reach the mass market.
• Status Quo Pricing- meeting the competition or going rate pricing.

The chapter also explained other ways of pricing including: discounts, allowance, rebates, and value-based pricing. All of which are pretty self explanatory.

The class comes to an end and I am glad to say that I enjoyed it. I learned a lot about Marketing and was able to see through the eyes of a businessman.