Fundamentals of Pricing CHAPTER 12 Product Distribution Promotion Price
Fundamentals of Pricing CHAPTER 12 Product Promotion Distribution Price
BASICS OF PRICING: Lecture Topics Meaning and Importance of price ° Economics of Pricing Pricing Based on Costs ricing Based on Competition Pricing Based on Customer Value
BASICS OF PRICING: Lecture Topics • Meaning and Importance of price • Economics of Pricing • Pricing Based on Costs • Pricing Based on Competition • Pricing Based on Customer Value
Price the amount of money, goods or services that must be given up to acquire ownership or use of a product
Price • the amount of money, goods or services that must be given up to acquire ownership or use of a product
Importance of Price: Customer's value Equation Perceived Value=Perceived Benefits-Perceived Costs monads
Importance of Price: Customer’s Value Equation Perceived Value = Perceived Benefits-Perceived Costs
Add value to the value Equation Offer Offer Extra Extra Help Convenience Offer Unique Highlight Products Your value
Add Value to the Value Equation Offer Extra Convenience Offer Extra Help Highlight Your Value Offer Unique Products
Importance of Price Price affects profits Profits a Total Revenue less Total Cost 兀=(P*Q)-(Qvc)(FC)
Importance of Price • Price affects profits: Profits = Total Revenue less Total Cost = (P*Q) - (Q*VC)-(FC)
Price-Quality Strategies Price Premium High Super Value Value Value Medium Overcharging Good-Value Value False Rip-Off Economy Economy
Price High Medium Low High Low Product Quality Med Premium Value Medium Value Economy Overcharging Rip-Off False Economy High Value Super Value Good-Value Price - Quality Strategies
consumer dena Demand curve:
• Demand Curve:
Influences on Shape of Demand Curve Market Structure . Monopoly .Oligopoly Monopolistic Competition Pure Competition:
Influences on Shape of Demand Curve Market Structure •Monopoly: •Oligopoly: •Monopolistic Competition: •Pure Competition:
Influences on Shape of Demand Curve Life Cvcle May see shifts of curve to the right due to ° promotion entry/exit of new competitors .change in taste A .change in technology 100 75 它50 25 10 30 Quantity
Influences on Shape of Demand Curve Life Cycle May see shifts of curve to the right due to: •promotion •entry/exit of new competitors •change in taste •change in technology A 0 25 50 75 100 0 10 20 30 Quantity Price
