Pricing

Pricing - Developing Pricing Strategies and Programs Towns,...

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Developing Pricing Strategies and Programs Towns, Spring 2009
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14-2 Quick Reminder! Sign up for your market research experiments
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14-3 Chapter Questions How do consumers process and evaluate prices? How should a company set prices for products or services? How should a company adapt prices to meet varying circumstances and opportunities? When should a company initiate a price change? How should a company respond to a competitor’s price challenge?
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14-4 Whirlpool’s Duet combo is nearly four times the price of comparable models
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14-5 The Importance of Price Price allocates resources in a free-market economy To the consumer. .. Price is the cost of something To the seller. .. Price is revenue
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14-6 What Is Price? Price is that which is given up in an exchange to acquire a good or service. Price
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14-7 Synonyms for Price Rent Tuition Fee Fare Rate Toll Premium Honorarium Special assessment Bribe Dues Salary Commission Wage Tax
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14-8 Trends Influencing Price Flood of new products Increased availability of bargain-priced private and generic brands Price cutting as a strategy to maintain or regain market share Internet used for comparison shopping
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14-9 Price X Sales Unit = Revenue Revenue – Costs = Profit Profit drives growth, salary increases, and corporate investment
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14-10 Pricing Objectives Profit-Oriented Sales-Oriented Status Quo
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14-11 Four approaches for selecting an approximate price level
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14-12 Return on Investment ROI = Net Profit after taxes Total assets Net profit after taxes divided by total assets. Return on Investment
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14-13 Market Share Market Share A company’s product sales as a percentage of total sales for that industry.
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14-14 Status Quo Pricing Objectives Maintain existing prices Meet competition’s prices Status Quo Pricing Objectives
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14-15 The Cost Determinant of Price Varies with changes in level of output Types of Costs Variable Cost Fixed Cost Does not change as level of output changes
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14-16 The Cost Determinant of Price Break-Even Pricing Profit Maximization Pricing Keystoning Markup pricing Methods Used to Set Prices
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14-17 Break-Even Pricing Break-Even Quantity = Total fixed costs Fixed cost contribution Fixed cost Contribution = Price - Avg. Variable Cost
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14-18 Cost-Oriented Pricing Strategies
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14-19 Other Determinants of Price Perceived Quality Promotion Strategy Distribution Strategy Competition Stages of the Product Life Cycle
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This note was uploaded on 04/22/2009 for the course BUAD 307 taught by Professor Morristowns during the Spring '07 term at USC.

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Pricing - Developing Pricing Strategies and Programs Towns,...

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