question
price
answer
determines a firms market share and product revenue also effects perceived value
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price floor
answer
no profits above set price
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price ceiling
answer
no demand above this price
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cost based pricing
answer
design a good- determine cost- set price based on cost- convince buyers of value
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value based pricing
answer
assess customer needs- set target price- determine costs that can be incurred - design product
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Customer value-based pricing
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setting price based on buyers' perceptions of value rather than on the seller's cost
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types of value based pricing
answer
1. good-value pricing
2. value-added pricing
2. value-added pricing
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cost-based pricing types of costs
answer
fixed
variable
total
variable
total
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cost based pricing types
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cost-plus (markup)
break-even (target return)
break-even (target return)
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break even volume
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fixed cost/ ( price per unit - variable costs per unit)
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questions companies should ask where assessing competition pricing
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how de0s the companies market offerings compare in term of customer value
how strong are the current competitors
what are their pricing strategies ?
how strong are the current competitors
what are their pricing strategies ?
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price design internal factors
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overall market strategy and objectives
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external factors
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-market and demand
-economy
-impact on other parties
-economy
-impact on other parties
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Overall marketing strategy
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pricing decisions must co ordinate with packaging promotion and distribution decisions regarding the price
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inelastic demand
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demand in which changes in price have little or no effect on the amount demanded
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elastic demand
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A situation in which consumer demand is sensitive to changes in price
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Response to the frugality or post recession consumption
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cut prices
-develop affordable items
- redefine value proposition
-develop affordable items
- redefine value proposition
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other external factors for pricing
answer
government
-resllers
-social concerns
-resllers
-social concerns
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product line pricing
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setting prices across an entire product line
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optional product pricing
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pricing optional or accessory products sold with the main product
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captive product pricing
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pricing products that must be used with the main product
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product bundle pricing
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combining several products and offering the bundle at a reduced price
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