Tactical Pricing Approaches

Read the overview below and complete the activities that follow.

A product's price tends to be so visible and definitive that customers often have trouble moving past price to consider other critical benefits the product affords. This characteristic puts pressure on marketing managers to establish pricing objectives that best reflect and enhance the value proposition, while at the same time achieving the firm's financial objectives.

This activity is important because marketing managers need to be able to determine what is the most appropriate pricing tactic to apply for a specific product. Considering how other brands inside and outside of a company's industry employ pricing tactics can be of value when determining what is the most appropriate pricing tactic to employ.

The goal of this activity is for you to demonstrate an understanding of several of the different pricing tactics used by marketing managers by identifying which type of pricing tactic a given company$-$specific example represents.

Once management establishes the overall pricing objectives and strategies, it's time to develop and execute the pricing tactics in the marketplace that will operationalize the strategies.

As with establishing pricing strategies, for a variety of reasons firms frequently rely on combinations of pricing tactics in the marketplace rather than putting all their eggs in one basket. When considering each approach, don't think of it as a stand$-$alone strategy but instead consider how it might work in tandem with other approaches that a marketing manager might decide to employ.