PRODUCT PRICING


PRODUCT PRICING

Page:

      PRODUCT PRICING FOR THE INDUSTRY

1

~ .. PRODUCT PRICING OBJECTIVES

2

~ .... PRICE BASIS

2

~ ...... Theoretical pricing model

3

~ ............ PRICING OBJECTIVES

~ ~ ...... Market Penetration Objectives

~ ~ ...... Market-Skimming Objectives

~ ~ ...... Early Cash Recovery Objectives

~ ~ ...... Satisfying Objectives

~ ~ ...... Product-Line Promotion Objectives

~ ~ ............ Operations

4

~ ~ ............ Markets + Trade Cell

5

~ ~ ............ Products

6

~ ~ ............ Competitors

7

~ ...... Problem of Pricing objectives

~ ...... i. Market-penetration objective

~ ...... ii- Market-skimming objective

~ ...... iii. Early-cash-recovery objective

~ ...... iv. Satisfying objective

~ ...... v. Product-line promotion objective

8

~ ...... Problems of Multiple parties

~ ...... i. Intermediate customers

~ ...... ii. Rivals

~ ...... iii. Suppliers

~ ...... iv. Government

~ ...... v. Other company executives

9

~ ............ MULTIPLE PARTY PRICING

~ ~ ...... Intermediate Customer Considerations

~ ~ ...... Rivals Considerations

~ ~ ...... Suppliers Consideration

~ ~ ...... Government Considerations

~ ~ ...... In-House Considerations

~ ~ ............ Operations

10

~ ~ ............ Markets + Trade Cell

11

~ ~ ............ Products

12

~ ~ ............ Competitors

13

~ ...... Problems of Marketing-mix interaction

~ ...... Problems of estimating Demand and Cost functions

14

~ .... PRICING DECISIONS

~ ...... Cost-oriented pricing

~ ...... i. Markup pricing

15

~ ...... ii. Target pricing

16

~ ...... Demand-oriented pricing

~ ...... ~ Price discrimination

17

~ ...... Competition-oriented pricing

~ ...... i. Going-rate pricing

18

~ ...... ii. Sealed-bid pricing

19

~ ............ PRICING MODELS

~ ~ ...... Cost Oriented : Mark-up Pricing

~ ~ ...... Cost Oriented : Target Pricing

~ ~ ...... Demand Oriented : Price Discrimination

~ ~ ...... Competition Oriented : Going-Rate Pricing

~ ~ ...... Competition Oriented : Sealed or Bid Pricing

~ ~ ............ Operations

20

~ ~ ............ Markets + Trade Cell

21

~ ~ ............ Products

22

~ ~ ............ Competitors

23

~ .... PRICE CHANGES

~ ...... Buyers' reactions to price change

~ ...... i. Price elasticity of demand

24

~ ...... ~ a) DIRECT ATTITUDE SURVEY

~ ...... ~ b) RELATIONSHIP OF PRICE -v- QUANTITY

~ ...... ~ c) MARKET TEST

~ ...... ~ d) ANALYTIC INFERENCE

~ ...... ii. Perceptual factors in buyers' response

25

~ ...... Competitors' reactions to price changes

27

~ ...... Decision theory for price changes

28

~ .... COMPETITOR PRICE REACTION

~ ...... 1) Market-share maintenance

~ ...... 2 Margin maintenance

29

~ .... PRODUCT PRICING LOGIC

~ ...... Interrelated demand

~ ...... Interrelated cost

~ ...... Effect of competition

30

~ ...... Alternative product-line pricing principles

31

~ ............ PRICE CHANGE DECIDERS

~ ~ ...... Buyers Reaction : Elasticity of Demand

~ ~ ...... Buyers Reaction : Perceptual Factors

~ ~ ...... Competitors Reaction : Price Reduction

~ ~ ...... Competitors Reaction : No Reaction

~ ~ ...... Competitors Reaction : Product Re-positioning

~ ~ ............ Operations

32

~ ~ ............ Markets + Trade Cell

33

~ ~ ............ Products

34

~ ~ ............ Competitors

35

~ ............ PRODUCT PRICING

~ ~ ...... Interrelated Demand Based

~ ~ ...... Interrelated Cost Based

~ ~ ...... Competition Based

~ ~ ...... Product-Line Pricing Based

~ ~ ...... Model or Price Theory Based

~ ~ ............ Operations

36

~ ~ ............ Markets + Trade Cell

37

~ ~ ............ Products

38

~ ~ ............ Competitors

39

~ .... HISTORIC FINANCIAL DATA

40

~ .... Historic Balance Sheet

41

~ ~ ...... Historic Costs & Margins

42

~ ~ ........ Historic Financial Ratios & Margins

43

~ ~ .......... Historic Operational Ratios & Margins

44

~ .... Financial forecast notes

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~ .... PRODUCT PRICING FINANCIAL FORECASTS : Current to 2028

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~ .... Base Forecast : Median Market Scenario Balance Sheet Forecast

47

~ ...... Base Forecast : Median Market Scenario Operational Costs Forecast

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~ ........ Base Forecast : Median Market Scenario Financial Ratios

49

~ .......... Base Forecast : Median Market Scenario Operational Margins

50

~ .... Short-Term Price Cutting Effect Balance Sheet Forecast

51

~ ...... Short-Term Price Cutting Effect Operational Costs Forecast

52

~ ........ Short-Term Price Cutting Effect Financial Ratios

53

~ .......... Short-Term Price Cutting Effect Operational Margins

54

~ .... Short-Term Price Increase Effect Balance Sheet Forecast

55

~ ...... Short-Term Price Increase Effect Operational Costs Forecast

56

~ ........ Short-Term Price Increase Effect Financial Ratios

57

~ .......... Short-Term Price Increase Effect Operational Margins

58

~ .... Promotional & Pricing Cost Objectives Balance Sheet Forecast

59

~ ...... Promotional & Pricing Cost Objectives Operational Costs Forecast

60

~ ........ Promotional & Pricing Cost Objectives Financial Ratios

61

~ .......... Promotional & Pricing Cost Objectives Operational Margins

62

~ .... Research & Product Cost Objectives Balance Sheet Forecast

63

~ ...... Research & Product Cost Objectives Operational Costs Forecast

64

~ ........ Research & Product Cost Objectives Financial Ratios

65

~ .......... Research & Product Cost Objectives Operational Margins

66

~ .... Market Share Building Objectives Balance Sheet Forecast

67

~ ...... Market Share Building Objectives Operational Costs Forecast

68

~ ........ Market Share Building Objectives Financial Ratios

69

~ .......... Market Share Building Objectives Operational Margins

70

~ .... Market Share Holding Objectives Balance Sheet Forecast

71

~ ...... Market Share Holding Objectives Operational Costs Forecast

72

~ ........ Market Share Holding Objectives Financial Ratios

73

~ .......... Market Share Holding Objectives Operational Margins

74

~ .... Market Share Harvesting Objectives Balance Sheet Forecast

75

~ ...... Market Share Harvesting Objectives Operational Costs Forecast

76

~ ........ Market Share Harvesting Objectives Financial Ratios

77

~ .......... Market Share Harvesting Objectives Operational Margins

78

~ .... Long-Term Product Price Reduction Balance Sheet Forecast

79

~ ...... Long-Term Product Price Reduction Operational Costs Forecast

80

~ ........ Long-Term Product Price Reduction Financial Ratios

81

~ .......... Long-Term Product Price Reduction Operational Margins

82

~ .... Long-Term Product Price Increase Balance Sheet Forecast

83

~ ...... Long-Term Product Price Increase Operational Costs Forecast

84

~ ........ Long-Term Product Price Increase Financial Ratios

85

~ .......... Long-Term Product Price Increase Operational Margins

86

~ .... Product Positioning Balance Sheet Forecast

87

~ ...... Product Positioning Operational Costs Forecast

88

~ ........ Product Positioning Financial Ratios

89

~ .......... Product Positioning Operational Margins

91

~ .... Financial data definitions

INDEX


INDEX

Alternative product-line pricing principles, 30
ANALYTIC INFERENCE, 24

Balance Sheet Base Forecast : Median Market Scenario, 46
Balance Sheet Historic, 40
Balance Sheet Long-Term Product Price Increase, 82
Balance Sheet Long-Term Product Price Reduction, 78
Balance Sheet Market Share Building Objectives, 66
Balance Sheet Market Share Harvesting Objectives, 74
Balance Sheet Market Share Holding Objectives, 70
Balance Sheet Product Positioning, 86
Balance Sheet Promotional & Pricing Cost Objective, 58
Balance Sheet Research & Product Cost Objectives, 62
Balance Sheet Short-Term Price Cutting Effect, 50
Balance Sheet Short-Term Price Increase Effect, 54
Buyers Reaction : Elasticity of Demand, 31
Buyers Reaction : Perceptual Factors, 31
Buyers' reactions to price change, 23

Company executives, 8
Competition Based, 35
Competition Oriented : Going-Rate Pricing, 19
Competition Oriented : Sealed or Bid Pricing, 19
Competition-oriented pricing, 17
COMPETITOR PRICE REACTION, 28
Competitors Reaction : No Reaction, 31
Competitors Reaction : Price Reduction, 31
Competitors Reaction : Product Re-positioning, 31
Competitors' reactions to price changes, 25
Cost Oriented : Mark-up Pricing, 19
Cost Oriented : Target Pricing, 19
Costs & Margins Historic, 41
Cost-oriented pricing, 14

Decision theory for price changes, 27
Demand Oriented : Price Discrimination, 19
Demand-oriented pricing, 16
DIRECT ATTITUDE SURVEY, 24

Early Cash Recovery Objectives, 3
Early-cash-recovery objective, 7
Effect of competition, 29

Financial data definitions, 91
Financial forecast notes, 44
Financial Ratios Base Forecast : Median Market Scenario, 48
Financial Ratios Long-Term Product Price Increase, 84
Financial Ratios Long-Term Product Price Reduction, 80
Financial Ratios Market Share Building Objectives, 68
Financial Ratios Market Share Harvesting Objective, 76
Financial Ratios Market Share Holding Objectives, 72
Financial Ratios Product Positioning, 88
Financial Ratios Promotional & Pricing Cost Objectives, 60
Financial Ratios Research & Product Cost Objective, 64
Financial Ratios Short-Term Price Cutting Effect, 52
Financial Ratios Short-Term Price Increase Effect, 56
Financial Ratios & Margins Historic, 42

Going-rate pricing, 17
Government, 8
Government Considerations, 9

HISTORIC FINANCIAL DATA, 39

Intermediate Customer Considerations, 9
Intermediate customers, 8
Interrelated cost, 29
Interrelated Cost Based, 35
Interrelated demand, 29
Interrelated Demand Based, 35
In-House Considerations, 9

Margin maintenance, 28
Market Penetration Objectives, 3
MARKET TEST, 24
Market-penetration objective, 7
Market-share maintenance, 28
Market-skimming objective, 7
Market-Skimming Objectives, 3
Markup pricing, 14
Model or Price Theory Based, 35
MULTIPLE PARTY PRICING, 9

Operational Costs Base Forecast : Median Market, 47
Operational Costs Long-Term Product Price Increase, 83
Operational Costs Long-Term Product Price Reduction, 79
Operational Costs Market Share Building Objectives, 67
Operational Costs Market Share Harvesting Objectives, 75
Operational Costs Market Share Holding Objectives, 71
Operational Costs Product Positioning, 87
Operational Costs Promotional & Pricing Cost Objectives, 59
Operational Costs Research & Product Cost Objectives, 63
Operational Costs Short-Term Price Cutting Effect, 51
Operational Costs Short-Term Price Increase Effect, 55
Operational Margins Base Forecast : Median Market, 49
Operational Margins Long-Term Product Price Increase, 85
Operational Margins Long-Term Product Price Reduction, 81
Operational Margins Market Share Building Objectives, 69
Operational Margins Market Share Harvesting Objectives, 77
Operational Margins Market Share Holding Objectives, 73
Operational Margins Product Positioning, 89
Operational Margins Promotional & Pricing Cost Objectives, 61
Operational Margins Research & Product Cost Objectives, 65
Operational Margins Short-Term Price Cutting Effects, 53
Operational Margins Short-Term Price Increase Effects, 57
Operational Ratios & Margins Historic, 43

Perceptual factors in buyers' response, 24
PRICE BASIS, 2
PRICE CHANGE DECIDERS, 31
PRICE CHANGES, 23
Price discrimination, 16
Price elasticity of demand, 23
PRICING DECISIONS, 14
PRICING MODELS, 19
PRICING OBJECTIVES, 3
Problem of Pricing objectives, 7
Problems of estimating Demand and Cost functions, 13
Problems of Marketing-mix interaction, 13
Problems of Multiple parties, 8
PRODUCT PRICING, 35
PRODUCT PRICING FINANCIAL SCENARIOS FORECASTS, 45
PRODUCT PRICING LOGIC, 29
PRODUCT PRICING OBJECTIVES, 1
Product-Line Pricing Based, 35
Product-line promotion objective, 7
Product-Line Promotion Objectives, 3

RELATIONSHIP OF PRICE -v- QUANTITY, 24
Rivals, 8
Rivals Considerations, 9

Satisfying objective, 7
Satisfying Objectives, 3
Sealed-bid pricing, 18
Suppliers, 8
Suppliers Consideration, 9

Target pricing, 15
Theoretical pricing model, 2