定价策略 课件 Chpt 07 - Price Promotions

TimJ.SmithPricingStrategy:SettingPriceLevels,ManagingPriceDiscounts,&EstablishingPriceStructuresPowerPointbyTimJ.Smith,PhDManagingPrincipal,WiglafPricingAdjunctProfessorofMarketing&Economics,DePaulUniversity©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.Chapter7PricePromotionsHowHolidaySales,Coupons,RebatesandOtherFormsofPricePromotionImpactProfitability©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.AgendaHowdoesapricepromotionimproveprofitability?Dopricepromotionsmostlygrowthemarketorgrowthesharewithintheexistingmarket?Arepricepromotionsagoodmeansofpricesegmentation?Whatcustomerbehaviorandpsychologicalinfluencesareaffectedbypricepromotions,andarethesegoodforthefirm?Howshouldapricepromotionbedesigned?Whatarecommonexamplesofpricepromotion?Howshouldanexecutiveevaluatetheeconomicefficiencyofapricepromotion?StretchQuestion:Howmanypricepromotionsarejustonetoomany

?©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.TargeteddiscountsenableacompanytochargedifferentpricestodifferentcustomersAllowsthepricesensitive

topurchaseatalowerpriceKeepstheutilitysensitive

purchasingatthehigher“list”priceIncrementalsalesatadiscountedpriceabovemarginalunitcostenhancesprofitabilityQuantityPriceRevenuew/oDiscountingAdditionalRevenueGainedfromDiscountingDemandMarginalUnitCost©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.DiscountingisPriceDifferentiationPromotionalDiscountsGrabSharePromotionalDiscountstendtoincreasesalesvolumeTheincreaseinvolumewillcomePrimarilyfromcapturingsharefromyoucompetitorSecondarilyfromgrowingtheoverallmarketNote:Shorttermreactionstodownwardpricemovementstendtobelargerthanlong-termreactions©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.ProspectTheoryPeopleplacemoreweighton“pain”thanonanequal“gain”TohelppeopleappreciatethegainUnbundlethesourcesofgainandhighlightthemBundlethesourcesofpainDiscountsareaformofExtraUnbundledGainSurchargesareaformofExtraPainLossesB

Value-Value+GainsA

ValueFunction©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.PromotionalDiscountingbenefitsfromProspectTheoryNegativeEffectsofPromotionalDiscountingImperfectsegmentationhedgePricepromotionscanprovideunnecessarypriceconcessionstocustomersthatotherwisewouldhavepaidthefullpriceDilution/cannibalizationofotherwisehighermarginsalesCustomerChurnPricepromotionsimproveprofitabilitybyencouragingbrandswitchingamongcustomers.Ifcustomerswhoswitcharenotcaptured,theresultissimplyahigh-customer-acquisitioncostwiththelossofcustomerretentionprofits©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.Consumerpriceexpectationscanbemodeledasanexponentialsmoothingofcurrentandlastobservedprices

RPt=aPt-1+(1-a)Pt RPt=ReferencePrice Pt-1=Pricepreviouslyobserved Pt=PricecurrentlyobservedPromotionaldiscountsresetpriceexpectationstoalowerlevel,dampeningdemandinfutureperiodswhentheproductisofferedatfullpriceFullpriceperiodswillincreasepriceexpectations,increasingdemandduringpromotionalperiodsTimePriceReferencePriceObservedPricea=0.925,peanutbuttera=0.83orangejuice©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.ResetsPriceExpectationsIncreasesPriceSensitivityPricepromotionsenhancebuyersensitivitytopricePromotionshighlightingbrandandpricealoneincreasepricesensitivityMarketingcommunicationshighlightingfeaturesandbenefitsincreaseutilitysensitivityanddecreasepricesensitivityCustomersthattendtobesensitivetoadvertisingalsotendtobemorepricesensitiveMarketgrowthfrompromotionaldiscountingislikelytocontributetothesizeofthepricesensitivesegment©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.ExcessivepromotionaldiscountscanmakelistpricesirrelevantMROandOfficeSuppliesPromotionaldiscountsinaGood/Better/BestlineupaffectconsumertradeoffsCrossProductCannibalizationDiscountinghigh-endproductstargetingutilitysensitivecustomersmayprovideunnecessarypriceconcessionstothissegmentLossofValue/PricePositionListPriceInvoicePriceNetPriceDivergentPricetoValueConvergentPricetoValueConstantPricetoValuePriceWaterfalls©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.ImpactsPricingIntegrityPromotionalDesignTargetedTemporarySpecialIrregular©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.ExamplesCouponingManufacturerscouponstoinducetrialStorecouponstoinducepatronageKeymetric–portionofcustomersfromcouponingresultingfromincrementalsalesratherthandisplacingnormalsalesTrialOffersEffectivewithproductsthatwillbepurchasedfrequently,havealowincrementalproductioncost,andhavebenefitsthatareself-evidentafteroneuseRebatesCanbeusedwithahighdegreeoftargeting©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.EvaluatingPromotionsConsiderCost(distribution,process,etc)RedemptionRatesDiscountDepthSalesvolumeinducedTypeofcustomerredeemingthepromotionConductaBreakEvenIncrementalSalesperRedemptionanalysis©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.CouponFaceValue$0.50ProcessingFee$0.07Price$3.00Margin40%

NewspaperIn-StoreCouponsDistributed1,000,00062,500Cost/1000Distributed$10$100DistributionCosts(CouponsDistributedXCost/1000Distributed)$10,000$6,250RedemptionRate5%80%CouponsRedeemed(CouponsDistributedXRedemptionRate)50,00050,000RedemptionCosts(CouponsRedeemedX(FaceValue+ProcessingFee))$28,500$28,500TotalCampaignCosts(DistributionCosts+RedemptionCosts)$38,500$34,750CostperBuyer(TotalCosts/CouponsRedeemed)$0.77$0.70TotalCampaignProfit(

CouponsRedeemedXPriceXMargin)$60,000$60,000ROI((IncrementalProfit–TotalCosts)/TotalCosts)36%42%Break-evenIncrementalUnitSalesperRedemption(TotalCosts)/TotalProfits)64%58%©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.SummaryPricepromotionsareaformofpricesegmentationinwhichpricesarereducedforthosewithalowerwillingnesstopayandregularpricesareofferedtothosewithahigherwillingnesstopay.Pricepromotionsgenerateincreasedsalesprimarilythroughencouragingbrandswitchingandsecondarilythroughincreasingthesizeofthemarket.Fromprospecttheory,weunderstandthatpartofthepowerofpricepromotionstodrivesalesderivesfromconsume