Module 19
Marketing plan
Planning should be designed to ensure
that the organisation’s goals are matched
to its marketing opportunities
Any tourism marketing plan must be
flexible enough to permit rapid adjustment
in the light of changing circumstances
Marketing planning means
knowing:
• Where the organisation is
• Where it wants to be
• What are its goals
• Who are its customers, and
• How it can reach them
PRICING
What is Price?
• Price: the amount of money charged for
a product or service, or the sum of
values that consumers exchange for the
benefits of having or using the product
or service
Why Is Price Important?
– It produces revenue
– It influences demand
Evolution of Pricing
• Most early pricing was through negotiation,
also known as “haggling” between buyer and
seller
• Fixed pricing became the standard practice
for self-serve retailing, charging one price for
all buyers
• Dynamic pricing: the practice of charging
different prices depending on individual
customers and situations
Common Pricing Mistakes
1. Pricing is too cost-oriented.
2. Prices are not revised often enough
to reflect market changes.
3. Prices do not take into account the
other elements of the marketing mix.
4. Prices are not varied for different
products, market segments, and
purchase occasions.
3 Approaches to Pricing
• Cost-Based
• Value-Based
• Competition-Based
Cost-Based Pricing Approaches
Break-even Chart for Target Price
Sell 30,000 to
Breakeven
1400000
1200000
Sell 15,000 to
cover overhead
Cost in dollars
1000000
Target profit
($200,000)
800000
Total revenue
Fixed cost
600000
Total cost
400000
200000
0
0
10000
20000
30000
40000
50000
60000
70000
Sales volume (Units)
Figure 10-4
Value-Based Pricing Approaches
Value-based pricing
– price based on buyers’ perceptions of
value rather than on the seller’s cost
• Everyday low pricing (EDLP)
– pricing consistently low, relatively few
discounts or temporary price promotions
• High-Low pricing
– higher prices are charged on a daily
basis, but frequent promotions
General Pricing Approaches
Product
Cost
Price
Value
Customers
Cost
Product
Cost-based Pricing
Customers
Value
Price
Value-based Pricing
Figure 10-5
Competition-Based Pricing
Competition-based pricing
–
–
Setting price based on the prices that
competitors charge for similar products
May be a market leader who sets prices
and the other companies follow suit
– Going-rate pricing sets prices at the level
of competition within the industry
– reflects collective wisdom of the
industry?
– Sealed-bid pricing is used for selling to
business and government, where bidding
is used
Pricing Strategy Summary
5 Key Considerations
• Customers
• Competition
• Channels
• Cost
• Company Considerations