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.