Gurus On Marketing

• Understanding price sensitivity. The factors affecting price
sensitivity are:
1 They are consumer or purchaser’s value, For those who
have studied Economics this is the question of utility and
marginal utility of consumers;
2 availability and attributes of substitutes;
3 difficulties in comparing substitutes;
4 total expenditure;
5 the end-benefit;
6 the shared cost;
7 the sunk investment effect – many purchasers are used in
conjunction with assets bought previously.
8 The price-quality effect and
9 the inventory effect.
Competition changes the nature of pricing. There are four types of
prices which are identified in the context of competition. These are
cooperative pricing, adaptive pricing, opportunistic pricing and
predatory pricing.
‘The challenge facing a pricing strategist is to analyse the reasons
for its competitors’ pricing in order to better anticipate how they
will price in the future.’
To respond to a specific environment, three types of pricing are considered,
these are skim pricing, penetration pricing and neutral pricing.
The rest of the book focuses on pricing over the product life cycle,
segmented pricing, pricing in the marketing mix, establishing foundations
for more profitable pricing, psychological aspects of pricing
and pricing with uncertainty.
Nagle’s book is a must-read book for those who want to understand
the nature of pricing and its importance in marketing mix.
NINE THOMAS T. NAGLE 129