{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Nov 2 - Pricing Strategy

Nov 2 - Pricing Strategy - price sensitivity Factors...

Info icon This preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon
Pricing Strategy November 2, 2009 Instructor: Tamar Milne
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Agenda The influence of pricing The 5 C’s of Pricing Company objectives Customers Competition For next class... 2
Image of page 2
Name Your Price 3
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
The Influence of Pricing Price: total of what a customer exchanges for a product; value The only P that generates revenue Highly visible tool, therefore effective Pricing is an art, not a science Evolve with the environment and consumers In the absence of other information, price is an indicator of quality 4
Image of page 4
Five C’s of Pricing 5 Value Company objectives Customers Competition Costs Channel members
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
1. Company Objectives 1. Sales orientation: maximize volume Units, revenue, or market share 2. Profit orientation: maximize profit, return Variation: set a target 3. Competitor orientation: position relative to the competition Focus on non-price elements of marketing mix 4. Customer orientation: maximize perceived value 6
Image of page 6
7
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2. Customer: Elasticity of Demand Elasticity:
Image of page 8
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 10
Image of page 11

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: price sensitivity Factors affecting elasticity: – Necessity? Or non-essential? – Wealth effect (a.k.a. income effect) – Availability of substitutes (reduced by brand loyalty) – Cross-price elasticity: complementary products – Proportion of budget Increasing revenue: – A price cut will work with elastic demand – A price increase will work with inelastic demand 8 Elastic or Inelastic? 9 2. Customer: Psychological Factors Reference prices Perception of EDLP vs. high/low pricing Odd pricing Familiarity or past experience with: – Brands – Product attributes – Evaluative criteria 10 3. Competition Level of competition often shapes pricing – Monopoly – Oligopoly – Monopolistic competition – Pure competition Decommoditize through differentiation 11 For Next Class. .. Readings: – Chapter 12: Pricing Concepts and Strategies 12...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern