Chapter 12 Notes

Chapter 12 Notes - Schedule Thursday, November 12, 2009 Mr....

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Unformatted text preview: Schedule Thursday, November 12, 2009 Mr. Roy Vallee, Chairman and CEO, Avnet, Inc 5:30 p.m. - 7:00 p.m. Professional Dress requested Memorial Union, Pima Room #230 RSVP: https://wpcarey.asu.edu/avnet Wpcarey.asu.edu/scholarships Schedule Today Exam 2 Recap Simulation Q4 Decisions due tonight Chapter 12 Wednesday No Class Veterans Day Monday 11/16 Chapter 12 Q5 Decisions due Ch. 12 - Pricing Concepts Internal/External Factors of Price Pricing Objectives Elasticity Cost-based Pricing Ch. 12 - Pricing Concepts New Product Pricing Methods of Pricing Product Mix Pricing Strategies Price Adjustment Strategies What is Price? $ - what you pay for something or The value that you exchange for the benefits of having or using the product/service (i.e. time, psychological costs, other resources) Value = Benefits - Service Benefits Brand Benefits Product Benefits Price & Other Costs Value Internal Factors of Price 1. Marketing Objectives to maximize profits to gain gain market share to infer a level of quality to survive Internal Factors of Price 2. Marketing Mix Strategy price needs to be consistent with other 3Ps (needs to reflect advertising, etc.) 3. Costs your costs affect your profit, so set the optimal price External Factors of Price 1. Demand for your product 2. Competition Competitors prices Strength of competition 3. Economy Cost of components (natural resources) Economic conditions maintaining price meeting competitions price profit-Oriented profit maximization satisfactory profits return on investment Pricing Objectives sales-Oriented market share sales maximization Price Elasticity Tells us how much the demand for a product will change with a change in price % CHANGE IN Quantity demanded of good A % CHANGE In price of good A E = Factors That Affect Elasticity Availability of substitutse Price relative to purchasing power Product durability A products other uses Elasticity of Demand elastic elastic Demand Demand Consumers buy more or less of a product when the price changes inelastic inelastic Demand Demand An increase or decrease in price will not significantly affect demand Unitary Unitary Elasticity Elasticity An increase in sales exactly offsets a decrease in prices, and revenue is unchanged Elasticity of Demand Price Goes... Revenue Goes......
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Chapter 12 Notes - Schedule Thursday, November 12, 2009 Mr....

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