P R IC IN G D EC IS IO N S

TATA N A N O

BY:
PRASHANT BHARDWAJ
AMIT JAIN
ARU TANEJA
MOHIT VERMA
SHUBHAM JAIN

PRICIN G AS A M ARKETIN G
STRATEGY
Pricing is an integral part of the 4Ps

of Marketing Mix.
Price is the amount paid by the
buyer to the marketer in exchange of
the product received or services
rendered.
Effective pricing is extremely
important for survival and growth in
the marketplace.
Price can be used as a promotional

PRICE D ISCRIM IN ATIO N

Price discrimination is the practice of

charging different prices in different

markets, for achieving the best possible
revenues and profits.
In order to earn a better return on
investment, a marketer may resort to
price discrimination.
Price discrimination can provide a
balance point where maximum profits
corresponds with the quantity that can
be sold at that price.

PEN ETRATIO N PRICIN G

Penetration strategy charges the

lowest price in order to capture

maximum market share when there
is high competition in market.
This strategy works better when
price elasticity of demand is higher.
Penetration pricing is done to fight
competition in an effective manner.

PRICE SKIM M IN G
Skimming is the technique of

charging a higher price initially and

lowering it subsequently to attract
customers from the next lower
socioeconomic category.
This strategy is mainly applicable for
newer products.

D ISCO U N TIN G
In discounting strategy, a product is

priced higher and then discounts or

coupons are offered.
Discounting is used so that
customers can get their next
purchases at a lower price.
Discounting is a form of sales
promotion.

G EO G RAPH ICAL PRICIN G

Geographical pricing is

advantageous when cost of

transportation accounts for a
significant part of the variable cost.
The company declares an ex-factory
price, on which specific additional
expenses related to transportation,
are charged for specific locations.

PSYCH O LO G ICAL PRICIN G

Psychological pricing strategy is

commonly used by marketers in the

prices they establish for their
products.
Psychological pricing is used to make
a certain impact on the psychology
of the buyer.
For ex- the prices of Bata shoes ends
with a digit 9 (rs. 799).

PRICE LIN IN G
If specified quantities are to be sold

at a specific price, it is called price

skimming.
This strategy is often applied in the
case of FMCG products.
A marketer uses this strategy to
promote the sales of the product.

PRICE LEAD ERSH IP

When price is the base of

competition in market, the

companies have to be alert and
respond to any change.
When one company sets off changes
in price while others follow it, the
company initiating price change is
called price leader.
This strategy is followed when a
company has substantial market

M O N EY FO R VALU E PRICIN G
Premium brands charge money for

value and do not follow competitors

pricing.
In this situation, the emphasis is on
product differentiation rather than
price.
The marketer fulfills the need of a
niche market , which is ready to pay
a premium if their demands are met.

Thank You.