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1
Chapter 11
Pricing Considerations andApproaches
 
 
2
What is Price?
 
(pp. 344-345)
The amount of money charged, but more broadlythesum of all the values consumers exchangesum of all the values consumers exchange forthe benefits of having or using a product orserviceHistorically the major factor affecting buyerchoice; butnon-price factorsnon-price factors have becomeincreasingly importantThe only element in the marketing mix thatproduces revenuesproduces revenues; all others represent costsFlexible tool, but often handled poorly –too cost-too cost-oriented and tacticaloriented and tactical (vs. customer-value orientedand strategic) –should “sell value” not priceshould “sell value” not price
 
The amount of money charged, but more broadlythesum of all the values consumers exchangesum of all the values consumers exchangeforthe benefits of having or using a product orserviceHistorically the major factor affecting buyerchoice; butnon-price factorsnon-price factorshave becomeincreasingly importantThe only element in the marketing mix thatproduces revenuesproduces revenues; all others represent costsFlexible tool, but often handled poorly –too cost-too cost-oriented and tacticaloriented and tactical(vs. customer-value orientedand strategic) –should “sell value” not priceshould “sell value” not price
 
3
 Setting Prices
 
(Fig. 11.1, Fig.11.5)
 
Internal FactorsInternal Factors
Costs
(pp. 350-351)
the “floor”
variable andfixed
“experiencecurve”or“learningcurve”Marketingobjectives 
(pp. 347-348)
 
Internal FactorsInternal Factors
Costs
(pp. 350-351)
the “floor”
variable andfixed
“experiencecurve”or“learningcurve”Marketingobjectives 
(pp. 347-348)
Marketing mix
ExternalExternalFactorsFactors
The market anddemand
(pp. 352-356)
“the ceiling”Competition
(p.356)
Otherenvironmentalfactors
(p. 357)
the economy,
 
ExternalExternalFactorsFactors
The market anddemand
(pp. 352-356)
“the ceiling”Competition
(p.356)
Otherenvironmentalfactors
(p. 357)
the economy,
 
PricingPricingDecisionsDecisions
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