PRODUCT PRICING
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PRODUCT PRICING FOR THE INDUSTRY 
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~ .. PRODUCT PRICING OBJECTIVES 
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~ .... PRICE BASIS 
2 
~ ...... Theoretical pricing model 
3 
~ ............ PRICING OBJECTIVES 
~ ~ ...... Market Penetration Objectives 

~ ~ ...... MarketSkimming Objectives 

~ ~ ...... Early Cash Recovery Objectives 

~ ~ ...... Satisfying Objectives 

~ ~ ...... ProductLine Promotion Objectives 

~ ~ ............ Operations 

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~ ~ ............ Markets + Trade Cell 
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~ ~ ............ Products 
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~ ~ ............ Competitors 
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~ ...... Problem of Pricing objectives 
~ ...... i. Marketpenetration objective 

~ ...... ii Marketskimming objective 

~ ...... iii. Earlycashrecovery objective 

~ ...... iv. Satisfying objective 

~ ...... v. Productline promotion objective 

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~ ...... Problems of Multiple parties 
~ ...... i. Intermediate customers 

~ ...... ii. Rivals 

~ ...... iii. Suppliers 

~ ...... iv. Government 

~ ...... v. Other company executives 

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~ ............ MULTIPLE PARTY PRICING 
~ ~ ...... Intermediate Customer Considerations 

~ ~ ...... Rivals Considerations 

~ ~ ...... Suppliers Consideration 

~ ~ ...... Government Considerations 

~ ~ ...... InHouse Considerations 

~ ~ ............ Operations 

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~ ~ ............ Markets + Trade Cell 
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~ ~ ............ Products 
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~ ~ ............ Competitors 
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~ ...... Problems of Marketingmix interaction 
~ ...... Problems of estimating Demand and Cost functions 

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~ .... PRICING DECISIONS 
~ ...... Costoriented pricing 

~ ...... i. Markup pricing 

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~ ...... ii. Target pricing 
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~ ...... Demandoriented pricing 
~ ...... ~ Price discrimination 

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~ ...... Competitionoriented pricing 
~ ...... i. Goingrate pricing 

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~ ...... ii. Sealedbid pricing 
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~ ............ PRICING MODELS 
~ ~ ...... Cost Oriented : Markup Pricing 

~ ~ ...... Cost Oriented : Target Pricing 

~ ~ ...... Demand Oriented : Price Discrimination 

~ ~ ...... Competition Oriented : GoingRate Pricing 

~ ~ ...... Competition Oriented : Sealed or Bid Pricing 

~ ~ ............ Operations 

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~ ~ ............ Markets + Trade Cell 
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~ ~ ............ Products 
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~ ~ ............ Competitors 
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~ .... PRICE CHANGES 
~ ...... Buyers' reactions to price change 

~ ...... i. Price elasticity of demand 

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~ ...... ~ a) DIRECT ATTITUDE SURVEY 
~ ...... ~ b) RELATIONSHIP OF PRICE v QUANTITY 

~ ...... ~ c) MARKET TEST 

~ ...... ~ d) ANALYTIC INFERENCE 

~ ...... ii. Perceptual factors in buyers' response 

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~ ...... Competitors' reactions to price changes 
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~ ...... Decision theory for price changes 
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~ .... COMPETITOR PRICE REACTION 
~ ...... 1) Marketshare maintenance 

~ ...... 2 Margin maintenance 

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~ .... PRODUCT PRICING LOGIC 
~ ...... Interrelated demand 

~ ...... Interrelated cost 

~ ...... Effect of competition 

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~ ...... Alternative productline pricing principles 
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~ ............ PRICE CHANGE DECIDERS 
~ ~ ...... Buyers Reaction : Elasticity of Demand 

~ ~ ...... Buyers Reaction : Perceptual Factors 

~ ~ ...... Competitors Reaction : Price Reduction 

~ ~ ...... Competitors Reaction : No Reaction 

~ ~ ...... Competitors Reaction : Product Repositioning 

~ ~ ............ Operations 

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~ ~ ............ Markets + Trade Cell 
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~ ~ ............ Products 
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~ ~ ............ Competitors 
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~ ............ PRODUCT PRICING 
~ ~ ...... Interrelated Demand Based 

~ ~ ...... Interrelated Cost Based 

~ ~ ...... Competition Based 

~ ~ ...... ProductLine Pricing Based 

~ ~ ...... Model or Price Theory Based 

~ ~ ............ Operations 

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~ ~ ............ Markets + Trade Cell 
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~ ~ ............ Products 
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~ ~ ............ Competitors 
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~ .... HISTORIC FINANCIAL DATA 
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~ .... Historic Balance Sheet 
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~ ~ ...... Historic Costs & Margins 
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~ ~ ........ Historic Financial Ratios & Margins 
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~ ~ .......... Historic Operational Ratios & Margins 
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~ .... Financial forecast notes 
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~ .... PRODUCT PRICING FINANCIAL FORECASTS : Current to 2028 
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~ .... Base Forecast : Median Market Scenario Balance Sheet Forecast 
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~ ...... Base Forecast : Median Market Scenario Operational Costs Forecast 
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~ ........ Base Forecast : Median Market Scenario Financial Ratios 
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~ .......... Base Forecast : Median Market Scenario Operational Margins 
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~ .... ShortTerm Price Cutting Effect Balance Sheet Forecast 
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~ ...... ShortTerm Price Cutting Effect Operational Costs Forecast 
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~ ........ ShortTerm Price Cutting Effect Financial Ratios 
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~ .......... ShortTerm Price Cutting Effect Operational Margins 
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~ .... ShortTerm Price Increase Effect Balance Sheet Forecast 
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~ ...... ShortTerm Price Increase Effect Operational Costs Forecast 
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~ ........ ShortTerm Price Increase Effect Financial Ratios 
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~ .......... ShortTerm Price Increase Effect Operational Margins 
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~ .... Promotional & Pricing Cost Objectives Balance Sheet Forecast 
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~ ...... Promotional & Pricing Cost Objectives Operational Costs Forecast 
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~ ........ Promotional & Pricing Cost Objectives Financial Ratios 
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~ .......... Promotional & Pricing Cost Objectives Operational Margins 
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~ .... Research & Product Cost Objectives Balance Sheet Forecast 
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~ ...... Research & Product Cost Objectives Operational Costs Forecast 
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~ ........ Research & Product Cost Objectives Financial Ratios 
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~ .......... Research & Product Cost Objectives Operational Margins 
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~ .... Market Share Building Objectives Balance Sheet Forecast 
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~ ...... Market Share Building Objectives Operational Costs Forecast 
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~ ........ Market Share Building Objectives Financial Ratios 
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~ .......... Market Share Building Objectives Operational Margins 
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~ .... Market Share Holding Objectives Balance Sheet Forecast 
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~ ...... Market Share Holding Objectives Operational Costs Forecast 
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~ ........ Market Share Holding Objectives Financial Ratios 
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~ .......... Market Share Holding Objectives Operational Margins 
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~ .... Market Share Harvesting Objectives Balance Sheet Forecast 
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~ ...... Market Share Harvesting Objectives Operational Costs Forecast 
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~ ........ Market Share Harvesting Objectives Financial Ratios 
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~ .......... Market Share Harvesting Objectives Operational Margins 
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~ .... LongTerm Product Price Reduction Balance Sheet Forecast 
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~ ...... LongTerm Product Price Reduction Operational Costs Forecast 
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~ ........ LongTerm Product Price Reduction Financial Ratios 
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~ .......... LongTerm Product Price Reduction Operational Margins 
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~ .... LongTerm Product Price Increase Balance Sheet Forecast 
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~ ...... LongTerm Product Price Increase Operational Costs Forecast 
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~ ........ LongTerm Product Price Increase Financial Ratios 
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~ .......... LongTerm Product Price Increase Operational Margins 
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~ .... Product Positioning Balance Sheet Forecast 
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~ ...... Product Positioning Operational Costs Forecast 
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~ ........ Product Positioning Financial Ratios 
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~ .......... Product Positioning Operational Margins 
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~ .... Financial data definitions 
Alternative productline pricing principles, 30
ANALYTIC INFERENCE, 24
Balance Sheet Base Forecast : Median Market Scenario, 46
Balance Sheet Historic, 40
Balance Sheet LongTerm Product Price Increase, 82
Balance Sheet LongTerm Product Price Reduction, 78
Balance Sheet Market Share Building Objectives, 66
Balance Sheet Market Share Harvesting Objectives, 74
Balance Sheet Market Share Holding Objectives, 70
Balance Sheet Product Positioning, 86
Balance Sheet Promotional & Pricing Cost Objective, 58
Balance Sheet Research & Product Cost Objectives, 62
Balance Sheet ShortTerm Price Cutting Effect, 50
Balance Sheet ShortTerm Price Increase Effect, 54
Buyers Reaction : Elasticity of Demand, 31
Buyers Reaction : Perceptual Factors, 31
Buyers' reactions to price change, 23
Company executives, 8
Competition Based, 35
Competition Oriented : GoingRate Pricing, 19
Competition Oriented : Sealed or Bid Pricing, 19
Competitionoriented pricing, 17
COMPETITOR PRICE REACTION, 28
Competitors Reaction : No Reaction, 31
Competitors Reaction : Price Reduction, 31
Competitors Reaction : Product Repositioning, 31
Competitors' reactions to price changes, 25
Cost Oriented : Markup Pricing, 19
Cost Oriented : Target Pricing, 19
Costs & Margins Historic, 41
Costoriented pricing, 14
Decision theory for price changes, 27
Demand Oriented : Price Discrimination, 19
Demandoriented pricing, 16
DIRECT ATTITUDE SURVEY, 24
Early Cash Recovery Objectives, 3
Earlycashrecovery objective, 7
Effect of competition, 29
Financial data definitions, 91
Financial forecast notes, 44
Financial Ratios Base Forecast : Median Market Scenario, 48
Financial Ratios LongTerm Product Price Increase, 84
Financial Ratios LongTerm Product Price Reduction, 80
Financial Ratios Market Share Building Objectives, 68
Financial Ratios Market Share Harvesting Objective, 76
Financial Ratios Market Share Holding Objectives, 72
Financial Ratios Product Positioning, 88
Financial Ratios Promotional & Pricing Cost Objectives, 60
Financial Ratios Research & Product Cost Objective, 64
Financial Ratios ShortTerm Price Cutting Effect, 52
Financial Ratios ShortTerm Price Increase Effect, 56
Financial Ratios & Margins Historic, 42
Goingrate pricing, 17
Government, 8
Government Considerations, 9
HISTORIC FINANCIAL DATA, 39
Intermediate Customer Considerations, 9
Intermediate customers, 8
Interrelated cost, 29
Interrelated Cost Based, 35
Interrelated demand, 29
Interrelated Demand Based, 35
InHouse Considerations, 9
Margin maintenance, 28
Market Penetration Objectives, 3
MARKET TEST, 24
Marketpenetration objective, 7
Marketshare maintenance, 28
Marketskimming objective, 7
MarketSkimming Objectives, 3
Markup pricing, 14
Model or Price Theory Based, 35
MULTIPLE PARTY PRICING, 9
Operational Costs Base Forecast : Median Market, 47
Operational Costs LongTerm Product Price Increase, 83
Operational Costs LongTerm Product Price Reduction, 79
Operational Costs Market Share Building Objectives, 67
Operational Costs Market Share Harvesting Objectives, 75
Operational Costs Market Share Holding Objectives, 71
Operational Costs Product Positioning, 87
Operational Costs Promotional & Pricing Cost Objectives, 59
Operational Costs Research & Product Cost Objectives, 63
Operational Costs ShortTerm Price Cutting Effect, 51
Operational Costs ShortTerm Price Increase Effect, 55
Operational Margins Base Forecast : Median Market, 49
Operational Margins LongTerm Product Price Increase, 85
Operational Margins LongTerm Product Price Reduction, 81
Operational Margins Market Share Building Objectives, 69
Operational Margins Market Share Harvesting Objectives, 77
Operational Margins Market Share Holding Objectives, 73
Operational Margins Product Positioning, 89
Operational Margins Promotional & Pricing Cost Objectives, 61
Operational Margins Research & Product Cost Objectives, 65
Operational Margins ShortTerm Price Cutting Effects, 53
Operational Margins ShortTerm Price Increase Effects, 57
Operational Ratios & Margins Historic, 43
Perceptual factors in buyers' response, 24
PRICE BASIS, 2
PRICE CHANGE DECIDERS, 31
PRICE CHANGES, 23
Price discrimination, 16
Price elasticity of demand, 23
PRICING DECISIONS, 14
PRICING MODELS, 19
PRICING OBJECTIVES, 3
Problem of Pricing objectives, 7
Problems of estimating Demand and Cost functions, 13
Problems of Marketingmix interaction, 13
Problems of Multiple parties, 8
PRODUCT PRICING, 35
PRODUCT PRICING FINANCIAL SCENARIOS FORECASTS, 45
PRODUCT PRICING LOGIC, 29
PRODUCT PRICING OBJECTIVES, 1
ProductLine Pricing Based, 35
Productline promotion objective, 7
ProductLine Promotion Objectives, 3
RELATIONSHIP OF PRICE v QUANTITY, 24
Rivals, 8
Rivals Considerations, 9
Satisfying objective, 7
Satisfying Objectives, 3
Sealedbid pricing, 18
Suppliers, 8
Suppliers Consideration, 9
Target pricing, 15
Theoretical pricing model, 2