Pricing and Dicing

Price Scavenger Hunt

by: Joshua Ardelean

Strategy/tactic:

1. Pricing as Positional Strategy- Vonage Phone company: They currently are running their ads saying their phone services are and always have been $24.99 a month. This is the main theme of their commercials.

2. New Product Pricing-

a. Skimming- PlayStation 3. When the product first came out it cost $600, the price now has dropped to around $400. Entertainment products that are highly anticipated generally are more expensive when they come out because the demand is so high, and people will do anything to get the product.

b. Penetration- Ultimate Electronics. The electronics companies constantly advertises, saying they are cheaper then Circuit City and Best Buy. They tell us that they shop the other stores daily, and adjust their prices to make sure they are the cheapest around.

3. Odd Pricing- Taco Bell. The fast food company runs ads and promotions on their new menu. Prices are not a "dollar menu," instead even cheaper. They have 79, 89, and 99 cent menus. This is done to strongly emphasis the great savings.

4. Loss leader- X-Box. The gaming company apparently sells their products at a price that actually nets them a loss per console they sell. The purpose is to win the gaming industry from Sony.

5. Multiple Unit Pricing- Bashas' products. Some products such as a bag of chips are market "2 for $3." A single bag may cost around $2 if purchased alone. The point is to entice people to buy more of the product by giving them a lower cost per unit for the more that they buy.