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Price Adjustment

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Five (5) price adjustment strategies

Discount and allowance pricing

This is when companies adjust their price to reward customer for certain response. Such as early payment of bills and buy one get one half price or free.

The many form of discount include a cash payment discount, a price reduction to buyers who pay their bills promptly. For examples “2/10 net 30,” this means although payment is due within 30 days, the buyer can deduct 2 percent if the bill is paid within 10 days. Also buyers that purchase large volumes receive a price reduction. Such discounts provide an incentive to customer to buy more from one given seller.
Functional discount also called trade discount is offered by seller to trade channels members who …show more content…

Segmented pricing takes several forms. Under customer segment pricing, different customer pay different prices for the same product or service. Museums, for example, may charge a lower admission for student and senior citizen, another example is tether in France they charge a cheaper arte for student during the week. Under product form pricing, different versions of the product are priced differently but not according to differences in their costs. For instance a 1-liter bottle (about 34 ounces) of Evian mineral water may cost $1.59 at your local supermarket. But a 5-ounce aerosol can of Evian Brumisateur Mineral Water Spray sells for a suggested retail price of $11.39 at beauty boutiques and spas. The water is all from the same source in the French Alps, and the aerosol packing costs little more than the plastic bottles. Yet you pay about 5 cents an ounce for one form and $2.28 an ounce for the other.

Using location pricing, a company charges different prices for different locations, even though the cost of offering each location is the same. For example a university in the state charge student from out the state higher tuition fee. Finally using time pricing, a firm varies its price by the season, the month, the day, and even the hour. Some public utilities vary their prices to commercial users by time of day and weekend versus weekday.
Segment pricing goes by many names. Robert Cross, a long time

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