1 Price Planning A Price Price PlanningRepresents the value of a good or service for both the seller and the buyer Price Planning Systematic decision making by an organization regarding all aspects of pricing

2 Factors Affecting Pricing Decisions Total Effects on Price DecisionsConsumers Competitors Cost Channel Members Government Total Effects on Price Decisions

3 Pricing Services 12/1/2017 Price is influenced by thenature of the service involved. The larger the market share, the higher the price that can be charged. Managing off-peak demand makes pricing services difficult. Bundling services into a single package and price is a common strategy. 12/1/2017 Unit IV - Services Marketing - Mr.K.Mohan Kumar

4 Wait Period for an AppointmentPricing Quiz Which dentist would you choose for a filling in your tooth? Dentist Cost for Filling Distance to Dentist Wait Period for an Appointment Time in Waiting Room Anesthesia A $50 15 miles 3 Weeks 1.5 hour None B $75 1 Week .5 hour Novocain C $125 3 miles 1 hour D $200 No wait Nitrous Oxide & Novocain

5 Customer Often Lack of Knowledge of Service PricesCustomers often lack reference prices for service Service variability limits knowledge Providers are unwilling to estimate prices Individual customer needs vary Collection of price information by customers is difficult Prices are not visible

6 The Role of Non-monetary PriceTime costs Search costs Convenience costs Psychological costs Do you trade time for money?

7 Price as an Indicator of Service QualityCan price attract some customers?

8 Price as an Indicator of Service QualityInfers High Quality Service Infers Low Quality Service

9 Three Basic Marketing Price Structures and Challenges for Services

10 A Customer-Focused Approach to The Pricing ProcessUnderstand Customer Value Determine Demand based on Competition and Offering Estimate Cost, Revenues Establish a Pricing Structure and Level Set Final Price