Study_Guide_for_Lecture_13_-_Price_Theory

Study_Guide_for_Lecture_13_-_Price_Theory - Study guide for...

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Study guide for lecture 13: Price theory What is Price 0. The element of the marketing mix that determines how much money you make 0. Too low… give money away 1. Too high… drive customers away 1. Textbook:  That which is given up in an exchange to acquire a good or service. 2. Barter: Exchanging goods and services for other goods and services rather than  for money. 2. A major factor in determining value 3. Value= Perceived benefits               Perceived cost 0. Increase value by increasing benefits or decreasing cost 1. Most consumers do not fully consider the non-financial costs 0. Transaction costs 1. Opportunity costs 4. Price/value heuristic 2. As a rule of thumb, we expect the more expensive item to be “better” 5. Positioning 3. Relative pricing is a signal to the market place 4. Inverse demand curve for luxury products 3. A promotional tool 6. Reduced price to encourage sales 4. So what should the price be? 7. It’s not that simple 8. Depends on 5. Organizational objectives 6. Demand 7. Costs Marketing 431 Study Guides © 2009 Lecture 13: Price theory page 1
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8. A lot of other stuff Objectives and constraints 5. Objectives 9. Profit 9. Long-term 10. Short term 2. Target return 3. Publicly traded companies 10. Assuming profits enough to stay in business… 11. Market share 12. Unit volume 13. Survival 14. Social Responsibility 6. Constraints 11. Issues that affect the price you can charge 12. Demand 15. Higher demand=higher price 13. Stage in the product life cycle 16. Introductory 17. Growth 18. Maturity 19. Decline 14. Product issues 20. Single product vs product line 4. What is the effect on other products 21. Cost 5. Long run cover all costs 6. Short run cover variable costs 22. Ability to change prices Marketing 431 Study Guides © 2009 Lecture 13: Price theory page 2
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15. Market issues
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This note was uploaded on 05/10/2010 for the course MKTG 431 taught by Professor Brucerobertson during the Spring '07 term at S.F. State.

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Study_Guide_for_Lecture_13_-_Price_Theory - Study guide for...

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