A Global
Perspective
Philip Kotler
Gary Armstrong
Swee Hoon Ang
11 Siew Meng Leong
Chin Tiong Tan
Oliver Yau Hon-
Ming
Pricing Products:
Pricing Strategies
11-1
,Video Case: Song Airlines
Discussion Questions:
1. How did Song lower fixed costs? How did the company
lower variable costs?
2. Which of the external factors do you believe had the
largest impact on Song’s pricing decisions?
3. What pricing approach did Delta use when setting
prices for passenger tickets on Song flights?
4. Can Delta successfully employ the lessons learned
from Song?
11-2
,Learning Objectives
After studying this chapter, you should be able to:
1. Describe the major strategies for pricing initiative
and new products
2. Explain how companies find a set of prices that
maximize the profits from the total product mix
3. Discuss how companies adjust their prices to take
into account different types of customers and
situations
4. Discuss the key issues related to initiating and
responding to price changes
11-3
, Pricing
• Price is the amount of money charged for a product
or a service.
• More broadly, price is the sum of all the values that
customers gives to gain the benefits of having or
using a product or service.
• Price is the only element in the marketing mix that
produces revenue; all other elements represent
costs.
• Price is also one of the most flexible marketing mix
elements. Unlike product features and channel
commitments, prices can be changed quickly.
11-4
Perspective
Philip Kotler
Gary Armstrong
Swee Hoon Ang
11 Siew Meng Leong
Chin Tiong Tan
Oliver Yau Hon-
Ming
Pricing Products:
Pricing Strategies
11-1
,Video Case: Song Airlines
Discussion Questions:
1. How did Song lower fixed costs? How did the company
lower variable costs?
2. Which of the external factors do you believe had the
largest impact on Song’s pricing decisions?
3. What pricing approach did Delta use when setting
prices for passenger tickets on Song flights?
4. Can Delta successfully employ the lessons learned
from Song?
11-2
,Learning Objectives
After studying this chapter, you should be able to:
1. Describe the major strategies for pricing initiative
and new products
2. Explain how companies find a set of prices that
maximize the profits from the total product mix
3. Discuss how companies adjust their prices to take
into account different types of customers and
situations
4. Discuss the key issues related to initiating and
responding to price changes
11-3
, Pricing
• Price is the amount of money charged for a product
or a service.
• More broadly, price is the sum of all the values that
customers gives to gain the benefits of having or
using a product or service.
• Price is the only element in the marketing mix that
produces revenue; all other elements represent
costs.
• Price is also one of the most flexible marketing mix
elements. Unlike product features and channel
commitments, prices can be changed quickly.
11-4
