Explain the Different Forms of Flexible Price Policy

This way a company is attract customers of different segments like age geographies income levels and more. Price discrimination is a selling strategy that charges customers different prices for the same product or service based on what the seller thinks they can get the customer to agree to.

Objectives Of Price Policy Powerpoint Slides

Oq is the equilibrium output.

. There are four common types of budgets that companies use. Accidental Death Benefit - If you pass away due to bicycle accidents the insurance policy for the cycle would offer a lump-sum payout to your surviving family members. Therefore at the current price Op the demand increases by qq 2.

But there is need to follow certain additional guidelines in the pricing of the new product. Railways for example has different pricing for senior citizens adults and children. Hourly Salary Commission Bonuses.

The policy decisions on pricing are also affected by the type of trade channels and the discounts that might have to be offered. Different Kinds of Pricing 1. 1 incremental 2 activity-based 3 value proposition and 4 zero-based.

In addition Cineplex charges different prices on different days Tuesday being the cheapest. There are only two main policy categories to choose from. Pricing a New Product.

These two types of cost-based pricing are as follows. Psychological pricing refers to the psychological pricing strategies marketers use to make customers buy the products triggered by emotions rather than logic. 8 Optional product pricing.

Example of Price Discrimination. The market segment or segments aimed at determination of price range. For example the basic product of KLM Airlines is offering or providing seats in the airplane for different flights.

Therefore there is a new equilibrium at this price where demand equals. One Price Policy is one in which all customers are charged the same price for all the goods and. However once the customers start purchasing these seats they are offered optional features along with the seats.

Flexible-Price Policy offer the same product to customers at different negotiated prices. Flexible-price policy A price policy that lets customers bargain for merchandise. Depending on the age demographic tickets for the same movie are sold at different prices.

FOB Free on Board Pricing 7. There are different pricing strategies to choose from but some of the more common ones include. Shopping for life insurance can seem overwhelming but deciding which type of policy you need is actually simple.

The Canadian entertainment company Cineplex is a classic example of a firm using the price discrimination strategy. Term life insurance and permanent life insuranceTerm life insurance the most popular type of life insurance lasts for a specific amount of time while whole life insurance the most popular. Value-based pricing Competitive pricing Price skimming Cost-plus pricing Penetration pricing Economy pricing Dynamic pricing Pricing is an underutilized growth lever.

Thus people of all age groups can travel but at different prices. When asking about compensation most people want to know about direct compensation particularly base pay and. Policy decisions have to be taken in the area of pricing.

Examples may be extra seat space more drinks. Product form basis Different versions of the product are priced differently as consumers will see or visualise the products differently. An example of Flexible Price Policy is cars because you usually buy cars at negotiated contracts.

For example the price of a 3. Most companies do not encounter it in a major way on a day-to-day basis. Hence the excess demand for qq 2 puts pressure on the price increasing it to Op 1.

Regardless of your cycles price opting for insurance can reduce your financial liabilities significantly. Flexible budgets take into account how changes in activity affect costs. Op is the equilibrium price.

The Four Major Types of Direct Compensation. These four budgeting methods each have their own advantages and disadvantages which will be discussed in more detail in this guide. A flexible-price policy X is one in which customers pay different prices for the same type or amount of merchandise.

Price based on the prevailing or ruling price 4. A flexible budget makes it easy to estimate what costs should be for any level of activity within a specified range. A the study of flexible prices is confined to microeconomics while macroeconomics focuses on sticky prices b macroeconomists use flexible prices to explain inflation and sticky prices to explain unemployment c flexible prices are typically assumed in the study of the long run while sticky prices are assumed in the study of the short run.

Some of the important types of pricing strategies normally adopted by firm are as follows. Refers to the simplest method of determining the price of a product. CIF Cost Insurance and Freight Price 8.

In cost-plus pricing method a fixed percentage also called mark-up percentage of the total cost as a profit is added to the total cost to set the price. However the supply is Oq. Marketing Essentials Chapter 26 Section 261.

One-price policy All customers are charged the same price for the goods and services offered for sale. It can be frequently observed in the case of airline companies. Exogenous causes shift the demand curve to the right to D 1 D 1.

When a country has its own currency as legal tender it can choose between the three broad types of exchange rate systems. Most importantly dynamic pricing depends on the marketing factors not the behavior and attitude of. By definition its a pricing strategy where a business sets variable and flexible prices of its products and services depending on the multiple factors like demand supply chain competition location time frame and other market conditions.

Pricing is a crucial managerial decision. When a flexible budget is used in performance evaluation actual costs are compared to what the costs should have been for the actual level of activity. Flexible pricing is used by the companies to gain competitive advantage.

Such strategies come in the form of. For example if you buy a yellow or red Camero you have to pay 500 more. Within the fixed exchange rate a country can choose a rigid peg or a crawling peg.

Customer basis In which one customer may pay one price for the product at one time and place and another may bargain to get a better discount and a lower price. This consists of i managed float and ii free float. The promotional policy is also tied in with the pricing policies.

This involves reducing the price by a minimal amount say 1 cent which makes the customer perceive the price to be less.

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