Sunday, July 30, 2017

Service marketing concept pricing strategies for services

Price is nothing but cost + profit = price.
Price is the medium for exchange of value between buyer and seller. It is an influencing factor in consumer decision making relates to a purchase.
Objectives of pricing:
      Increase the sales
      To maximize the profits
      To increase the market share
      To satisfaction of consumer
      To meet the competition
Pricing methods:
Variable cost
Cost based pricing
Fixed cost
Demand based pricing
Competition based pricing               skimming pricing
Strategy based pricing                      penetration pricing
Demand based pricing:
      By customer
      By product or service
      By location
      By time
      By quality
Competition based pricing:
parity pricing or going rate pricing
pricing below competitive level or discount pricing
pricing above competitive level or premium pricing
Factors effecting in service pricing:
organizational factors
Market mix elements                                        internal factors
Positioning
Service cost
    External factors:
I.                    Demand
II.                  Competition
Price elasticity of demand:
          It means desire to a product purchase the ability to product and willingness to pay the product.
      Price the product
      Income level
      Taste and preference
      Size of the population
      Related goods price
      Advertising efforts
Pricing strategies:
      Skimming strategies
      Penetration pricing strategies
      Differential pricing strategies
      Geographic pricing strategies
      Product pricing strategies
      Price building
      Premium pricing
      Image pricing
      Complementary pricing
      Competitive pricing strategy
      Loss-leader strategy, two part pricing.
Pricing strategies for services:
          A profit org and many non-profit org set prices all their products or services.
          Companies handling in a pricing in variety of wages. In small companies price are said by the companies loss in large companies pricing is handling by division product line managers.
Meaning:
          To a manufacture price represents quality of may recorded by the firm/sells but to a customer. It represents securities and his perception of value of the product.
               Quality money received by the seller
Price = ------------------------------------------------------------------
               Quality of good/services received by the buyer
Pricing strategies:
          The method of pricing which were discussed earlier must be used strategically to achieve the org goals. An effective pricing strategy must identify new price can be combined with other elements of marketing mix.
Service pricing:
          A customer pays for its ability to satisfy some specific need/want. This reports a “value” to the product pricing plays a important role in the marketing mix of service.
          Pricing attracts revenue to the business and has direct input on profits.
          In simple terms price is the exchange value for a expressed in terms of money in marketing teems price for a buyer is the value. The imports for the quality and quantity of budget.
Role of pricing:
          Pricing decisions have an impact on all party of the market system, suppliers, intermediates, customers, competitors and the govt. And all elected by pricing
if effects the standard of living of the people it regulates sales growth and thus being economic development.
its an important competitive tool especially those services which all price sensitive for the markets
pricing also helps the org to achieve financial objective
Steps involved in pricing decision:
          Setting and place involved following some logical price once set is not final it must be a continues process always subject to adjustments find.
      Analyzing the organizational objectives
      Analyze cost incurred in delivering the service
      Levels and customer characteristics
      Examine competitor pricing & positioning
      Consider and regulatory relating to pricing
      Implemented suitable strategy an market condition
      Monitor the market response to the price set and identify problems.
Establishing pricing objectives foundation of pricing:
Objectives: 
          Like other areas of marketing placing pricing of products begins with and setting of pricing objectives are foundations for the price policies and strategies to be formed and implemented in due course.
Survival:
          In advertise market situations, the pricing objectives may involve desire levels of profits to ensure survival  intensive competition changing consumer wants/critical cash condition will result in survival as objective.
Maximize profits:
          Taking advantage of a sudden the firm may set a high price to earn maximize in the short duration. This involves cost revenue and profits, which is difficult to establish in service firms.
Maximize market share:
          The objective may be significant to these service firms necessary to achieve economic of large scale in and promotion in this process it gains competitive advantage and turn realize profitability.
Service , quality, leadership:
          A firm may position its service offering in of high price and high quality segment of the market to build a quality leader image for itself. High price restaurants and personal call centers and ex. of high pricing to superior quality.
Simulating:
          Firms that which to maximize their official t specific type of customer need to recognize the differential ability to pay among various market segments.
Ex: Railways offerings
Cash flow management:
          Product pricing are externally important to the financial manager. In part marketing plans did not as a rule make any major claim on a company’s cash receiver.