Marketing Price and Product Summary
Price, is the value placed on what is exchanged. Something of value is exchanged for satisfaction and utility.
Price Competition
Match, beat the price of the competition. To compete effectively, need to be the lowest cost producer.,Must be willing and able to change the price frequently. Customers adopt brand switching to use the lowest priced brand.sellers move along the demand curve by raising and lowering prices among Demand Curve
Non-Price Competition
Emphasize product features, service, quality etc.Can build customer loyalty towards the brand. Must be able to distinguish brand through unique product features.Customer must be able to perceive the differences in brands and view them as desirable.Must promote the distinguishing features to create customer awarenessPrice differences must be offset by the perceived benefits.sellers shift the demand curve out to the right by stressing distinctive attributes
Factors Affecting Pricing Decisions
Organizational and Marketing Objectives
Types of Pricing Objectives( profit market share cash flow status quoo survival)
Buyers Perceptions,(elastic in elastic demand , ◦Available substitutes ◦urgency of need ◦brand loyalty) The less elastic the demand, the more beneficial it is for the seller to inc. p
Select an approximate price level
Demand Oriented Pricing
Price Skimming Charge highest price possible that buyers who most desire the product will pay. Attract market segment more interested in quality, status, uniqueness etc.Consumers demand must be inelastic.
Penetration Pricing Price reduced compared to competitors to penetrate into markets to increase sales.Less flexible, more difficult to raise prices than it is to lower them.Good as a barrier to entry.Appropriate when the demand is elastic.Use if there is an increase in economies of scale through increased demand.
Odd-even pricing, end prices with a certain number, $99.95 sounds cheaper than $100., may tell friends that it is $99.Price bundling, Offer a
Price Competition
Match, beat the price of the competition. To compete effectively, need to be the lowest cost producer.,Must be willing and able to change the price frequently. Customers adopt brand switching to use the lowest priced brand.sellers move along the demand curve by raising and lowering prices among Demand Curve
Non-Price Competition
Emphasize product features, service, quality etc.Can build customer loyalty towards the brand. Must be able to distinguish brand through unique product features.Customer must be able to perceive the differences in brands and view them as desirable.Must promote the distinguishing features to create customer awarenessPrice differences must be offset by the perceived benefits.sellers shift the demand curve out to the right by stressing distinctive attributes
Factors Affecting Pricing Decisions
Organizational and Marketing Objectives
Types of Pricing Objectives( profit market share cash flow status quoo survival)
Buyers Perceptions,(elastic in elastic demand , ◦Available substitutes ◦urgency of need ◦brand loyalty) The less elastic the demand, the more beneficial it is for the seller to inc. p
Select an approximate price level
Demand Oriented Pricing
Price Skimming Charge highest price possible that buyers who most desire the product will pay. Attract market segment more interested in quality, status, uniqueness etc.Consumers demand must be inelastic.
Penetration Pricing Price reduced compared to competitors to penetrate into markets to increase sales.Less flexible, more difficult to raise prices than it is to lower them.Good as a barrier to entry.Appropriate when the demand is elastic.Use if there is an increase in economies of scale through increased demand.
Odd-even pricing, end prices with a certain number, $99.95 sounds cheaper than $100., may tell friends that it is $99.Price bundling, Offer a