ch11 - Chapter 11 Pricing Decisions Introduction to Pricing...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 11 Pricing Decisions Introduction to Pricing Issues * Basic concepts * Target costing * Price escalation * Environmental issues * Gray market goods * Dumping * Price fixing * Transfer pricing * Countertrade
Background image of page 1

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

View Full DocumentRight Arrow Icon
How to Set Price * The global manager must  develop systems and policies  that address * Price floor: minimum price * Price ceiling: maximum price * Optimum prices: function of  demand * Must be consistent with global  opportunities and constraints Basic Pricing Concepts * Law of One Price   would prevail in a  truly global market * International trade helps keep 
Background image of page 2
prices low and low prices keep  inflation in check * Global markets exist for certain  products—integrated circuits, crude  oil * National markets reflect costs,  regulation, demand, competition— beer Global Pricing Objectives and Strategies * Managers must determine the  objectives for the pricing objectives * Unit sales * Market share
Background image of page 3

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

View Full DocumentRight Arrow Icon
* Return on investment * They must then develop strategies to  achieve those objectives * Penetration pricing * Market skimming Market Skimming and Financial Objectives * Market skimming * Charging a premium price * May occur at the introduction stage of  product life cycle Penetration Pricing and Non-financial Objectives
Background image of page 4
* Penetration pricing * Charging a low price in order to  penetrate market quickly * Appropriate to saturate market prior to  imitation by competitors Companion Products * Products whose sale is dependent upon  the sale of primary product * Video games are dependent upon the sale of the  game console * “If you make money on the blades, you can give away the razors.” The Target-Costing Process
Background image of page 5

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

View Full DocumentRight Arrow Icon
* Does the price reflect the product’s quality? * Is the price competitive given local market  conditions? * Should the firm pursue market penetration, market  skimming, or some other pricing objective? * What type of discount (trade, cash, quantity) and  allowance (advertising, trade-off) should the firm  offer its international customers? * Should prices differ with market segment?
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/07/2010 for the course MKTG BA511 taught by Professor Dick during the Spring '10 term at Andrew Jackson.

Page1 / 23

ch11 - Chapter 11 Pricing Decisions Introduction to Pricing...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online