Principles and Practice of Marketing

David Jobber

Chapter 10
Pricing Strategy
 Pricing methods

Cost

Pricing
methods

Competition Marketing

D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 2

 Marketing-orientated pricing
Value to Marketing
customer strategy

Explicability Price-quality
relationships

Marketing-oriented Product line

Competition pricing
pricing

Effect on Negotiating
distributors/ margins
retailers

Costs Political
factors

D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 3

 Pricing using EVC analysis
40 000
Added value

Life-cycle
cost 200 000 200 000 EVC =
90 000
Purchase 50 000
price 80 000
Start-up 30 000 30 000
costs
20 000

Post-
purchase 120 000 120 000
costs 100 000

Reference New New

product product X product Y
D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 4
 Layers of competition
Tertiary
competitors

Secondary
competitors

Immediate
competitors
Technically similar products

Different products solving the same

problem in a different way

Different products solving or eliminating

the problem in a different way

D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 5