f10 MKTG 3104 Student 13, 14. Pricing

f10 MKTG 3104 Student 13, 14. Pricing - MKTG 3104 Pricing...

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Click to edit Master subtitle style MKTG 3104 Pricing Strategy
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11/5/10 CONTENT OBJECTIVES 1. Model price and its relationship to value 1. Understand steps in price setting and the related issues and analysis Pricing objectives and constraints Demand and revenue curves Cost, volume, price, profit relationships Pricing strategies
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11/5/10 PRICE Money or other considerations exchanged for the ownership or use of a good or service. Ø Barter in 2009: Ø ____400,000______companies ( International Reciprocal Trade Association)
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11/5/10 + - Captures value for the seller via profits Create value for the buyer Marketing Model of Price and TOTAL OFFER VALUE = Perceived benefits Price Higher prices may also create benefits and value if: Buyers infer ______quality______from price High price adds __________status or + benefits value price Product Promotion place Reference price --- more psychologic al
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11/5/10 Steps in Setting Price (Chapter {E C4A28C-1F3 -4810-AB30-7 AE6C4DB0 1} 1. Identify objectives, cons {7D03DF96-D2BC-49 1-A010-C8DDB 49124 } 2. Estimate demand, revenue {DE410E2D-D517-48D1-8CF1-07F084BFC132} Determine cost, profit, volume relationships
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11/5/10 Steps in Setting Price (Chapter {E C4A28C-1F3 -4810-AB30-7 AE6C4DB0 1} 4. Set approximate price {7D03DF96-D2BC-49 1-A010-C8DDB 49124 } 5. Set list price (TEXTBOOK) {DE410E2D-D517-48D1-8CF1-07F084BFC132} BOOK – do not need to know subtypes of geographical adjustm
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11/5/10 Step 1. Set Pricing Objectives 1. Price for Profit Does this mean long term profit or current profit? Short term profit or target return objective – need to know cost/demand curves to decide price Long term horizon – sacrifice short-term profits for better growth, market share, or competitive advantage, which often
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11/5/10 2. Price to Increase Sales or Market Share Easily communicated targets ___dollar_____ sales important for leverage with distribution channels Step 1. Set Pricing Objectives
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11/5/10 Experience Curve Effect As cumulative volume doubles, unit cost decreases by a fixed percentage Why? Learning curve for production, marketing Process innovation Product redesign Implication? Sell more units to lower costs & low
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Click to edit Master subtitle style 85% Experience Curve = 15% drop in cost Uni t Cos t Cumulative Volume
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11/5/10 3.
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f10 MKTG 3104 Student 13, 14. Pricing - MKTG 3104 Pricing...

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