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Ch 14 6-23 - e Step 5 set the price 2 Step five set the...

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Ch 14 1. Step 4: select an appropriate price level 356-364 a. Demand oriented prices i. Skimming- you set a high price with a high profit margin. 1. Use if buyers are price insensitive (innovators and early adopters) filthy rich folks. 2. Also used for fad or fashion, the life cycle is really short. 3. Not a market share strategy. ii. Penetration- means penetrating the market. 1. This is a market share strategy. We want to gain as much market share as possible. 2. Set price that lots of people can afford the product and repeat purchases. They become brand loyal, and the price allows getting into many distribution channels 3. Has a long product life cycle iii. prestige, price lining, odd even, target b. Cost oriented prices i. Standard mark up, cost-plus, experience curve c. Profit oriented i. Target profit, target return on sales, target ROI 387 d. Competition oriented i. Customary, above-at-below, loss leader
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Unformatted text preview: e. Step 5- set the price 2. Step five set the price 3. Step 6- allow for adjustments a. Discounts i. Quantity, seasonal, trade - members of a distribtion chanels, cash ii. Allowances iii. Geography 1. For original…. 4. Legal and regulatory aspects of pricing 374-376 a. Price fixing- you get with your competitors and you set the same high price. Also known as collusion. Do not play golf with your competitors b. Price discrimination – you cannot discriminate on pricing. Gender, race, age, etc. i. Exceptions c. Deceptive pricing – the common one be bait and switch- you advertise a very low price on a product but you have no intention on selling them product that turns out to be a high price. You bait them with a low price product, but sell high price product. i. Fid 14-9 5. Applying marketing knowledge a. Questions 3,4,5 DO THESE...
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