Ch15_NE - Pricing Concepts Chapter 15 Prepared by Deborah...

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Prepared by Deborah Baker Prepared by Deborah Baker Texas Christian University Texas Christian University Canadian Adaptation by Miguel Morales Canadian Adaptation by Miguel Morales Saint Mary’s University Saint Mary’s University COPYRIGHT © 2006 by Nelson, a division of Thomson Canada Limited. All rights reserved  Pricing Concepts Chapter 15
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2 COPYRIGHT © 2006 by Nelson, a division of Thomson Canada Limited. All rights reserved  Learning Objectives 1. Discuss the importance of pricing  decisions to the economy and  to the individual firm. 2.  List and explain a variety of pricing  objectives. 3.  Explain the role of demand in price  determination.
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3 COPYRIGHT © 2006 by Nelson, a division of Thomson Canada Limited. All rights reserved  Learning Objectives (continued) 4.  Understand the concept of yield  management systems. 5.  Describe cost-oriented pricing  strategies. 6.  Demonstrate how the product life  cycle, competition, distribution and  promotion strategies, customer  demands, the Internet and extranets,  and perceptions of quality can affect 
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4 COPYRIGHT © 2006 by Nelson, a division of Thomson Canada Limited. All rights reserved  In the broadest sense,  price allocates resources  in a free-market economy The Importance of Price To the consumer. .. Price is the cost  of something To the seller. .. Price is revenue and profit source
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5 COPYRIGHT © 2006 by Nelson, a division of Thomson Canada Limited. All rights reserved  What Is Price? Price is that which is given  up in an exchange to acquire  a good or service.
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6 COPYRIGHT © 2006 by Nelson, a division of Thomson Canada Limited. All rights reserved  The Importance of Price to Marketing Managers Revenue Profit   The price charged to customers  multiplied by the number of units  sold. Revenue minus expenses
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7 COPYRIGHT © 2006 by Nelson, a division of Thomson Canada Limited. All rights reserved  The Importance of Price To earn a profit,  marketers must select a price  that is not too high  or not too low,  a price that equals  the perceived value to target consumers Revenue  =  Unit Price   Number of units sold Revenue pays for every activity.   What’s left over is Profit.
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8 COPYRIGHT © 2006 by Nelson, a division of Thomson Canada Limited. All rights reserved  Trends Influencing Price Setting Flood of new  product introductions Increased availability of bargain-priced private and generic brands Price cutting as a strategy to maintain or regain market share A general decline in consumer  confidence after terrorist attacks Trends  in the Market
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COPYRIGHT © 2006 by Nelson, a division of Thomson Canada Limited. All rights reserved 
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This note was uploaded on 08/22/2009 for the course MKTG 1301 taught by Professor Bethpett during the Fall '05 term at Niagara College.

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Ch15_NE - Pricing Concepts Chapter 15 Prepared by Deborah...

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