Page 215 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes 11.5.3 Service Portfolio Pricing

A number of product relationships can be identified as being important for pricing purposes:
Optional additional services
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Captive services
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Competing services
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Price Bundling
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11.5.4 Tactical Pricing

Some of the tactical uses of pricing are analyzed below:

Tactical pricing can provide short-term competitive advantage.
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Tactical pricing can be used to remove unplanned excess supply.
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Short-term tactical pricing can be used to protect markets against new entrants.
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Discriminatory pricing with respect to time that may have been part of the strategic
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pricing plan can be implemented by a number of tactical programmes.
Similarly, discriminatory pricing with respect to place must be translated from a strategic
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plan to a tactical programme.
For discriminatory pricing between different consumer segments, the problem of turning
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a strategy into a tactical programme hinges on the ease with which segments can be
isolated and charged different prices.
Tactical pricing programmes are used to motivate intermediaries.
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11.5.5 Pricing Strategies for Public Sector Services

The pricing of services which by their very nature require a high degree of central planning, but
which are expected to exhibit some degree of marketing orientation, present particular challenges
to marketers. It may be difficult or even undesirable to implement a straightforward price-
value relationship with individual service users for a number of reasons:
External benefits may be generated by a service, which is difficult or impossible for the
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service provider to appropriate from individual users.
The benefits to society at large may be as significant as the benefits received by the
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individual who is the immediate recipient.
Pricing can be actively used as a means of social policy.
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11.5.6 Internal Market Pricing

A number of possible solutions to the problem of internal pricing can be identified:
1. If an external market exists, a ‘shadow’ price can be imputed to the transfer, reflecting
what the transaction would have cost if it had been brought in from outside.

(a) Where no external market exists, bargaining between divisional managers can take
place, although the final outcome may be a reflection of the relative bargaining
strength of each manager.

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