Pricing

Pricing of
of Services
Services
Pricing
Pricing of
of Services
Services

Influencing factors:

 No Ownership of services
 Input and Output Variability
 Price Value Relations
 Influence of Non-monetary Costs
 Price-Quality Relations
Pricing
Pricing Objectives
Objectives

Classifications:

 Revenue-oriented Objectives
 Operation-orientated Objectives
 Patronage-oriented Objectives
Approaches
Approaches to
to Pricing
Pricing of
of Services
Services

 Cost Based Pricing

 Competition based Pricing
 Demand based Pricing [Value Pricing]
Value
Value Pricing
Pricing

Four important Value Perceptions:

 Value is low price

 Value is Everything I want in a Service
 Value is the quality I get for the price I pay
 Value is what I get for what I give
Customer
Customer Delivered
Delivered Value
Value [CDV]
[CDV]
Pricing
Pricing Strategies
Strategies Linked
Linked to
to Value
Value Perceptions
Perceptions

Situation 1: Value is low price

Strategy adopted:
 Discounting
 Psychological Pricing
 Synchro-Pricing
 Penetration Pricing
Pricing
Pricing Strategies
Strategies Linked
Linked to
to Value
Value Perceptions
Perceptions

Situation 2: Value is Everything I want in a Service

Strategy adopted:
 Prestige Pricing
 Skimming Pricing
Pricing
Pricing Strategies
Strategies Linked
Linked to
to Value
Value Perceptions
Perceptions

Situation 3: Value is the quality I get for the price I pay

Strategy adopted:
 Value Pricing
 Market Segmentation Pricing
Pricing
Pricing Strategies
Strategies Linked
Linked to
to Value
Value Perceptions
Perceptions

Situation 4: Value is what I get for what I give

 Price Framing
 Price Bundling
 Complementary Pricing
 Captive Pricing
 Two-Part Pricing
 Loss-Leader Pricing