Principles of Marketing - S7 - Pricing Strategy.pdf -...

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2019/2020 -Principles of Marketing – Pricing StrategyPricing StrategyProfessor Julien Schmitt1
2019/2020 -Principles of Marketing – Pricing StrategyMMain Definitions in PricingMPrice DeterminationMPricing StrategiesMPrice PromotionMNew Trends in Price Determination2
2019/2020 -Principles of Marketing – Pricing StrategyPricing°Another P of the marketing mix is “price”. It represents decisions relativeto the amount of money that consumers will have to spend to acquire theproduct. In this regards, it also is an important element of the positioningof the brand. Price is still part of Step 3 of the marketing process (offerformulation and implementation).3
2019/2020 -Principles of Marketing – Pricing StrategyMain Definitions in Pricing°Price Definitions°Definition:Price represents the amount of money that consumersmust spend to buy a product/service. Like the other elements of themarketing mix, price contributes to communicate theproduct/service’s positioning.°Particularities of price within the marketing mix: This variableshas however a specific place in the mix as it is the only one thatconstitutes an income rather than an investment. Moreover, it is themix variable that is the quickest to modify.°Importance: In difficult economic times, price is a variable thatconsumers are specifically sensitive to°Price and ValuePerceived value of a product/service by consumers represents the differencebetween perceived benefits and perceived sacrifices associated to the auproduct /service (cf. Session 1).In this model, price is often considered as a perceived sacrifice. It canhowever sometimes be seen as a benefit as a high price is sometimesperceived by consumers as a sign a high quality, and consumers cansometimes derive an emotional benefit from having bought an expensivequality product.4
2019/2020 -Principles of Marketing – Pricing StrategyMain Definitions in Pricing°Price and PsychologyEconomists have for long considered that consumers apprehended price ina rational way; considering it as a direct representation of the product’sfacial value. Actually, price perception is subject to numerouspsychological biases:°Reference prices:consumers evaluate price using a reference pricethat can be internal (based on memory, often wrong) or external(based on environmental cues). There is a zone within which a

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Marketing, Pricing, producer, Price determination, Professor Julien Schmitt

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