Marketing: Real People, Real Choices

Sesi 10
Chapter 10

Price

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“Yes, but What Does It Cost?”
• Price is the assignment
of value, or the amount
the consumer must
exchange to receive the
offering.
 Includes money, goods,
services, favors, votes,
or anything else that has
value to the other party
 Opportunity costs must
also be considered.
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Price Planning

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Costs, Demand, Revenue, and
the Pricing Environment

• In order to set the right price,

marketers must understand
quantitative and qualitative
factors that can influence
pricing strategy success.

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Step 2: Estimate Demand

• Demand refers to customers’ desire for a product.

 How much are customers willing to pay as the price of
the product goes up or down?
• Economists use demand curves to illustrate the effect
of price on quantity of a product demanded.
• The law of demand: As price goes up, quantity
demanded goes down.

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Demand Curves for Normal and
Prestige Products

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Shift in Demand Curve

Effective Marketing can

stimulate shifts !

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Estimating Demand for Pizza

Number of families in market 180,000

Average number of pizzas per family per year 6

Total annual market demand 1,080,000

Company’s predicted share of the total market 3%

Estimated annual company demand 32,400 pizzas

Estimated monthly company demand
2,700 pizzas

Estimated weekly company demand 675 pizzas

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 Price Elasticity of Demand

• Price elasticity is the percentage change in unit sales

that results from a percentage change in price.
• Elastic demand is when changes in price have large
effects on the amount demanded.
• Inelastic demand is when changes in price have little or
no effect on the amount demanded.

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Price-Elastic and
Price-Inelastic Demand

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Price Elasticity of Demand: Elastic
Demand

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Price Elasticity of Demand: Inelastic
Demand

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Cross-Elasticity of Demand

• Changes in the prices of other products may affect a

product’s demand.
 If products are substitutes, an increase in the price of
one will increase demand for the other.
 If one product is essential for use of second, an
increase in the price of one decreases demand for
another.

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Markups and Margins: Pricing
through the Channel
• Markup is an amount added to the cost of the
product to create a price at which the channel
member will sell the product.
 Gross margin
 Retailer margin
 Wholesaler margin
 List price or manufacturer’s suggested retail price
(MSRP)

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Markups Through the Channel

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Pricing Strategies and Tactics

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Psychological, Legal, and Ethical
Aspects of Pricing

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The Psychology of Price

• Many pricing frameworks are based on the notion of a

highly rational consumer.
 In the real world, consumer perceptions and
judgments of price aren’t nearly so logical!
• Psychological aspects of price raise a number of
ethical and legal considerations.
Restaurants have found odd–even pricing influences
spending. Have you seen local dining establishments
who have employed such tactics?

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Ethical/Sustainable Decisions
in the Real World
• First sold in 2008, over 30 million Snuggies were sold
by 2015
• Allstar (maker of Snuggies) paid $8 million in fines for
“false advertising” in that all the costs associated with
the second “free” Snuggie were not disclosed.
Do you believe that the FTC should create additional
regulations on advertising that would create greater
requirements for full disclosure in advertising?

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Copyright

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QUIZ KE 2
1. Jelaskan mengapa kurva demand untuk Prestige
Product, bentuknya tidak straight line seperti normal
product?
2. Jika COGS produk kita Rp.450.000,- hitung berapa
mark up yang seharusnya dipasang, agar channel
member (retailer) mendapatkan margin sebesar
25%?
3. Sebutkan dan jelaskan 3 macam, strategy harga
(pricing strategy) yang Anda pahami.

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