Market Pricing

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Copyright: 2013
Pages: 24
Source title: Marketing Decision Making and the Management of Pricing: Successful Business Tools
Source Author(s)/Editor(s): Dr. Rajagopal (EGADE Business School, Tecnologico de Monterrey (ITESM), Mexico)
DOI: 10.4018/978-1-4666-4094-8.ch006

Keywords: Business & Management / Business Science Reference / Marketing

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Abstract

While addressing the price games, this chapter argues that in the price sensitive consumer segment firms drive their profit by applying psychological pricing and zero effects on competitive prices. The zero price effect in reference to the price of a competitor is a phenomenon whereby the demand for a product or service is significantly greater at a price congruent to that of a competitor. The author also addresses an interesting and significant factor affecting the pricing strategies of the firms concerning reactive pricing and price wars. The discussion on the above perspectives in the chapter reveal that historically firms struggling in market competition have taken price for granted, assuming that their main objectives were to cover costs and achieve a target rate of return. Now, companies are adopting more sophisticated approaches. A strategic perspective on pricing includes price objectives, price strategy, price structure, price levels, and price promotions.

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