Pricing products
Existing-product pricing Strategies
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- 2. Price Adjustment Strategies
- 3. Last-Minute Pricing
- 5. Promotional Pricing
| Existing-product pricing Strategies
The following strategies can be used for existing products. 1. Product bundle pricing- is combing several of their products and offer the bundle at a reduced price.Example- hotels sell specially priced weekend packages that include room, meals, and entertainment and other services. 2. Price Adjustment Strategies: Companies usually adjust their basic prices to account for various customer differences and changing situations: discount pricing and allowances, discriminatory pricing, and yield management. A. Volume Discount: Most hotels have Special Rates to attract customers who are likely to purchase a large quantity of hotel room, either for single period or throughout the year. B. Discount based on time of Purchase: A seasonal discount is a price reduction to buyers to purchase services out of season, when the demand is lower. Seasonal discounts allow the hotel to keep the demand steady during the year. C. Discriminatory Pricing: Discriminatory pricing refers to segmentation of the market and pricing differences based on price elasticity characteristics of these segments. D. Yield management: A yield management is system is used to maximize a hotel’s yield or contribution margin. This is done by the rates that a hotel will charge and the number of rooms available for each rate based on projected occupancies for a given period. 3. Last-Minute Pricing: although last-minute pricing provides an out-let for unsold inventory, it is not a substitute for effective marketing and a well-devised pricing strategy 4. Psychological Pricing: Psychological aspects such as prestige reference prices, round figures, and ignoring end figures are used in pricing. Consider the psychology of prices, not simply the economics. 5. Promotional Pricing: They temporarily price their products below its price and sometimes even below cost, for special occasions such as introduction of the product or festivals. Promotional pricing gives guests a reason to come and promotes a positive image for the company. | Page Download 23.6 Kb. Share with your friends:
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