Industrial Marketing

This chapter began with an overview of the characteristics of industrial prices which clearly distinguish it from consumer pricing. The different methods of industrial pricing are marginal pricing which emphasizes marginal costs and marginal revenues, EVC which considers the economic value to the customer, break-even analysis which determines the break-even point, target costing, target ROI pricing, cost-plus pricing, and supply demand pricing.

List price, net price, and geographic pricing are the three important types of prices. The two important pricing strategies discussed are cost-based and market-based strategies. The factors affecting these strategies are company objectives and strategies, competition, cost, nature of derived demand, and legal considerations.

The methods of pricing the product at different stages of the product lifecycle are mainly price skimming, penetration pricing, experience curve pricing, and price leadership strategy. Competitive bidding is the most common process in the business markets.