Professional Documents
Culture Documents
Phillip
Kevin Lane
Discussion Questions
1. How do consumers process and evaluate prices?
Marketing Mix
Revenue Producer
Cost
Product
Price
Cost
Place
Promotion
Cost
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Pricing
Forms
Price
Components
Functions
$31.50
$33.50
Bargaining
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Selective Pricing
Negotiate Prices
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Monitor Customers
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Pricing Department
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Reference Prices
99 $1.
Price Endings
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A Black T-Shirt
Armani - $275
Gap - $14.90
H&M - $7.90
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Determining Demand
Price sensitivity Estimating demand curves Price Elasticity of Demand
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Estimating Costs
Demand
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Estimating Costs
Types of costs
Variable Costs
Total Costs
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Estimating Costs
Accumulated Production
Experience Curve
(Learning Curve)
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Estimating Costs
Target Costing
Market research
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Design engineers
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Worth to Customer
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High Price
(No possible demand at this price)
Ceiling price
Customers assessment of unique product features Orienting point Competitors prices and prices of substitutes Costs Floor Price
Low Price
(No possible profit at this price)
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Markup Pricing
Variable cost per toaster $10
Fixed costs
Expected unit sales
$300,000
50,000
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Target-Return Pricing
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Target-Return Pricing
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Perceived-Value Pricing
Customers perceived-value
Performance $$$ Warranty $ Customer support $ Reputation $$
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Value Pricing
EDLP
THOUSANDS OF
Level of Quality
P1
C1
P2 C2
High
Pricing
Low
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Going-Rate Pricing
Commodities
Auction Pricing
English auction
(ascending bids)
Dutch auction
(descending bids)
Sealed-bid auction
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Brand Quality
Differentiated Pricing
Promotional Pricing
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Cutting Prices
Competitor Moves
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