Subjective Pricing

Subjective Pricing

• • Reasonable Price Method

  • Highest Price Method

  • Loss Leader Method

  • Intuitive Price Method

Subjective Pricing Method

This is the idea that intuition and special knowledge about the customers' ability to pay are the most important. These methods are not numerical based and do not take into account cost factor percentage, profit margin needed, and goals. The major concerns are that they are covering costs, there is profit, and customers are willing to pay the price.

These methods should not be used independently, but as an addition to the other methods we will be covering in this section.

Reasonable Price Method

Pricing that is created by what we feel would be a bargain or value to customers. "What price would I pay for this item?"

Highest Price Method

Establishing a price based upon the highest price a customer is willing to pay.

Loss Leader Method

Pricing items so that they are at cost, slightly below cost, or making very little profit. The idea behind this pricing method is in attracting customers in hopes that they will purchase other items that have a higher profit margin.

Intuitive Price Method

This looks at making a guess about the selling price based upon interactions with customers, experience within the industry, or good judgement to determine what represents value from the customer's perspective. Prices will change several times as they track success of sales in meeting business goals.

Think about it:

• • Give an example of the Reasonable Price Method.

  • Give an example of the Loss Leader Method.

  • Give an example of when you would use the Highest Price Method.

  • Give an example when you would use the Intuitive Price Method.

A list of activities you want your students to do for the week's topic. You can choose to make a table that has a column for activity/task, location (i.e. where to submit completed activity), and due date.

A list of assessments (for the activities) and the points for each. You can choose to make a table that has a column for the assessment and another column for the point value. The assessment text in the table can also be hyperlinked to a rubric document.

• • A list of additional resources/links related to the week's topic for the students' reference or for extension.