m


 






 


„ Service is any act or performance .That

one party can offer to another that is
essentially tangible and does not result in
any ownership of any thing .Its
production may or may not tied to
physical products.
m

 



„ It is intangible
„ It doesn¶t result in ownership
„ It may or may not be attached to physical
product.
„ It is an activity or process
„ It may not be keep in stock
m


 

„ mrice of a product or service may be seen as a
financial expression of value of that product or
service,for a customer price is the monetary
expression of the value to be enjoyed benefits
of a product or service as compared with other
available items.
„ Higher price is associated with better quality .In
service fixed cost is high and variable cost is
low. mrice of same service can be changed
according to demand.
›


   












 


„ Cost
ost based
„ Demand based
„ Competition based
ÀCost based pricing

¬

 





 



 





 


  








  

 




 ¬





 


 


 
 








 







 
 
„ Demand based
It involves setting prices consistent with customer
perception of value .prices are based on what
customers will pay for the service.
„ Competition based
Focus is on the price charged by other firms in the same
industry or market.
Does not imply charging the identical rate but use it as an
anchor for the firm¶s price.
E.g.- In oligopolies with a few large service providers like
airlines ,rental car industry .
×












„ Small firms may change too little to be

viable.
„ Heterogeneity of services limits
comparability.
„ mrices may not reflect customer value.


 

„ alue = Benefits ± cost

alue in services means

„ alue is the lower price
„ alue is every thing in service
„ alue is quality
m




„ The pricing tripod explains the foundation under lying
the price strategies.
„ It consist of cost ,competition ,value to customer
„ The cost that firm needs to recover usually impose
minimum price for a specific service offering.
„ Customer¶s perceived value of offerings sets a ceiling
on price.
„ The price charged by competitors determines where
with in the floor to ceiling range the price can be set.
mrice=direct cost +overhead cost+ profit margin
m







 




„ Customer prefer cues like company reputation, level of

advertising to access the quality.
„ In other situation when quality is hard to detect on price
varies in great deal with in a class of services
consumer may believe that price is best indicator of
quality.
„ In case of high rate services like medical treatment
customer look price as a surrogate for quality.
„ Thus in addition to cover the cost and match
competitors prices, price must be set with care to
convey the appropriate service quality.
m



  

 






„ Discounting
„ Odd pricing
„ menetration pricing
In these case the price is set at a low level inorder to
attract high volume sales thus penetrating the market and
gaining substantial share

„ Mixed pricing
This pricing contains both penitration and skimming
price policies then reduce the price as competitors
enter the market to defend the organisation¶s positions
and attract new customers
m



 


 

„ mrestige price
„ Skimming price
Here the supplier ³skims the cream´of the market
by offering a product or a service at a high price on low
volume basis.
„ alue price
„ Cost plus pricing
Here the cost is based on the cost of producing goods
or providing service
„m
 
¬ 


 

  
 


  


 

 




  



 
 

 


 

 


  

 







 









 
¬ 

   





 
 













¬ 

 


  
 








3 


 






„ Customer knowledge of service price- price-price is a price point in
memory for goods or a service.
„ High degree of variability often exists across providers of services-
services-
not every physicians define a check up the same way.
„ mroviders are willing to estimate prices in advance ,service
providers ,fundamental reason being they do not know them
selves what the service will involve until the process of service
delivery unfolds.
„ Individual customer needs vary
„ Comparison of price become difficult unlike goods.
(where the product range is displayed for comparison like to
compare)
„ mrice invisibility-
invisibility- particularly in financial services most customers
know only about the rate of return and not the costs they pay in
form of fund and service fee.
m




 




„ Service guarantee
„ Benefit driven
driven-- pricing that aspect of service
that creates value.
„ Flat rate ±Quoting a fixed price in advance.
„ Too low price ± in accurate influence

„ Too high price ±difficult to meet service

delivery.
½
   





¬


  

 







 


 


 
 





 


 
 


 

, 









¬ !



"


 


 




 

















 

" 








 



¬




 




#¬


 
 
" 


 
$

  %!!

 
"  
&!'

($
 " 

 )


¬

 





  


$$


 

¬

 


 
  
*+'

$



 




 
 


"

 

"


 

"  "



 *


 -


-


     

"


 
"  


 

 
 
$




 
 

#  
 

 


 .

 

 

  
¬





 
 
*
 


 **&
 

 
  

  

 ++!

$ 

" 

$


#  /


 
",01 

$


" 




$
"
 

  



 

 

2
"

"

"
$  
 
"




$
"
 

$

" 



3
  





 

0

 
 

0

$ 

%


$

$ 


m


 

 

#

 *"




 " 



 





4
 
 "

# "
  



 








"

"

%"+
%"&+$

  
" "
    








 
"

%"!
%"!

 



 
  
¬




 



 

  
 
 


# "
 
  
 $ 



 


-
 






 



 

$  






 "



$

 
¬




  

-

"

  
 







  

-    

½ 



¬


 
$ 
   $



 


 

0$
56


 78-

 59 

9 

"


 


/  
 
$





 

 


"



:  

  






 

-


 
 

$

$  
 



" $


$   
¬


  

 




 
¬


 "


 










 
   "








  

  

m ×
m
m

"

 ;

<=2 "
,> (29;

 <>%¬
%"! %"! %"! %"! %"!
u GMS

%"! %" ! %"*+ %".! %" !

5 GMS
R" + %"11 %".! %"!
u
G %" +

%"! %"&&! %" 1 %"! %"+

5
G


, 




$
 -
> 
 



 





  





 $
  


 



 


 






 



#