Microsoft Word marketing doc

Sealed-bid pricing
This is a competitive oriented pricing, very common in contract business 
where firms bid for jobs. Under it a contractor bases his price on expectations 
of how competitors will price rather than on a strict relation to his costs or 
demand. As the contractor wants to win the contract, he has to price the 
contract lower than the other contractors. But, a bidding firm cannot set its 
price below cost. If it sets the price much higher than the cost, its chance of 
getting the contract will be least.

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4. 
Analysing competitors prices and offers 
Under this method, the company bases its price largely on competitors 
price paying less attention to its own costs or demand. The company might 
charge the same prices as charged by its main competitors or a slightly higher or 
lower price than that. 
5. 
Selecting the pricing methods
An important cost oriented pricing method is target profit pricing. Under 
which the company tries to determine the price that would produce the profit it 
wants to earn. This pricing method uses the popular break even analysis.
According to it, price is determined with the held of a ‘break-even chart’. 
6. 
Selecting the final price
For the selection of final price a marketer has to take into consideration 
some other important factors which are, psychology of prices, company pricing 
policies and impact of price on others.
Setting the base (list) price, the next task in pricing is to establish 
specific pricing policies and strategies in several aspects of the pricing structure 
such as Geographical price policies, zone price policy, uniform deliver price 
policy etc. One of these aspects relates to discounts and allowances deductions 
from the list price. Management has the option of offering quantity discounts, 
trade discounts, cash discounts, and other types of deductions. The factor of 
freight costs must also be considered in pricing strategy. 
Management should decide whether to offer the same price to all similar 
buyers (one-price strategy) or to adopt a variable pricing strategy. Single 
pricing a relatively new development – can effect a company’s marketing 
programme. A company is to modify its basic price in order to accommodate 
differences in customers, products, locations etc. This is a major difference 
relating to price discrimination and other aspects of a company’s marketing 
programme. 
Pricing a new product is a difficult and challenging management task. A 
company introducing a new innovative product can adopt any one of the 
following two price policies. 
(i)
Market skimming pricing and 
(ii)
Market penetration pricing. 

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The company may choose to set a high price initially to ‘skim’, the 
market. The market penetration pricing is in which a relatively low price is set 
on the new product when it is introduced in the market. Unit pricing, a 
relatively new development, can effect a company’s marketing programme.
Some firms, especially retailers, have adopted price lining as a marketing 
strategy. Many retailers use leader pricing to stimulate sales. Most firms prefer 
to use promotion, product differentiation and other non-price marketing 
activities rather than to rely only on price as sales stimulant.