{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 12 - Chapter 12 Pricing Price money exchanged for...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 12 – Pricing Price – money exchanged for the ownership or use of a good or service Barter – exchanging goods and services for other goods and services Price equation: Final price = List Price – Incentives and allowances + Extra Fees “The higher the price, the higher the quality” Value pricing – the practice of increasing product and service benefits while maintaining or decreasing the price Profit equation: Profit = Total Revenue – Total Cost Common approaches to price levels: (1) Demand-Oriented (2) Cost-Oriented (3) Profit- Oriented (4) Competition-Oriented Demand-Oriented Approaches – approach emphasizes customer tastes and preferences o Skimming Pricing – setting the highest initial price that customers really desiring the product are willing to pay. Once these customers’ demand is met the price is lowered for the next layer of customers. o Penetration pricing - setting a low initial price to appeal to the mass markets o Prestige pricing – setting high price so that quality or status is associated with the product and will attract customers o Odd-Even Pricing – setting prices a few cents under an even number to give the image as below a certain price o Target pricing – when manufacturers estimate the price the ultimate consumer will spend and bases their price off estimated profit of wholesalers and retailers o Bundle pricing – the marketing of two or more products in a single package price.
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
Image of page 2
This is the end of the preview. Sign up to access the rest of the 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