Lecture 6

Lecture 6 - 4/24/2007 1 Where Weve Been Advanced pricing...

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Unformatted text preview: 4/24/2007 1 Where Weve Been Advanced pricing strategies-Price Discrimination-Two-part tariffs Bundling-Bundling-Dynamics Today- Non-price strategies - advertising Influencing Demand for Your Product - I Can you influence the demand curve that you face? How would you like to change demand?- Shift demand outwards- Change elasticity of demand Why? Influencing Demand for Your Product - II What can you do to influence demand?- Promotion/Advertising- Promotion/Advertising- Product Design 4/24/2007 2 How Might Promotions or Advertising Affect Demand? Provides information to consumers Our product exists Characteristics of our product Persuades consumers Images or associations that create prestige or differentiation. Important distinction between Search vs. Experience characteristics Advertising Providing Information on Product Characteristics Search characteristics - characteristics that consumer are verifiable prior to purchase (e.g. horsepower, mhz, calories, looks, price) Experience characteristics - characteristics that consumers cannot ascertain prior to purchase (e.g. taste, quality) Our Product Tastes Great - I Will customers believe this statement? In general, probably not. This can make it hard to advertise experience characteristics....
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This note was uploaded on 09/03/2009 for the course ECON 106E taught by Professor Ackerberg during the Spring '08 term at UCLA.

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Lecture 6 - 4/24/2007 1 Where Weve Been Advanced pricing...

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