May 2, 2011

Chapter 10 : Pricing Decision ( Part 3 )


In developing the product mix pricing strategies, a product manager has various option to use. Discuss with examples the five (5) options.


a) Product Line pricing
- Setting prices for a closely related set of product or product line.
- The product can differ in small ways : feature ( 17inch and 21 inch TV )

b) Price bundling
- Offer product in a package
- Lower that the sum of the individuals components
- e.g : TV, DVD player, Home Theater
- Sometime the price can be higher
- e.g : McD Happy Meals + Toy

c) Complementary pricing
- Products that are use together
-e.g: Razors and Blade / PS2 and Games / Printer and Cartriges.

d ) Auction
- e-commerce business such as have tremendous growth.
- Seller put the lowest price and the buyer will offer them the price they willing to pay

e) Periodic discounting
- Varies price over time.
- Appropriate when some customers are willing to pay higher to have the product or services during a particular time.
- e.g : Clothing retailer mark down items that are slow sellers
          Movie tickets cost more in the weekends.

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