m1l5 - David Robinson © D Robinson 2010 Fall 2010 Module 1...

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Unformatted text preview: David Robinson © D. Robinson, 2010 Fall 2010 Module 1 Delighting Customers Lecture 5: Pricing & The Value Proposition Price as one element of the Marketing Mix Marketing Mix Product Price Place Promotion Class 5: Pricing • Pricing and economics • Pricing objectives • Pricing strategies • New Product pricing • Pricing in Maturity • Pricing tactics The familiar “Demand Curve” $ Price Fewer people want to buy at Quantity demanded higher prices The familiar “Demand Curve” $ Price On the other hand: “In any market, some Quantity demanded people want to pay more” Price too high E $ Price Low Q Quantity demanded Segway Personal Transporter $5,145 ! Price too high E $ Price Q we produce Low Q Quantity demanded We have this many left over Price too low E We may not be able to meet demand, and . . . $ Price High Q Quantity demanded Price too low E We may not be able to meet demand, and $ Price High Q Quantity demanded These people wanted to pay more, so we “leave money on the table” Means: Give up some profit we could’ve made Differentiation Moves the curve up (and allows us to charge more) $ Price Quantity demanded Smart Pricing [® reader article] means charging many different prices Firms that practice “Smart Pricing” understand that some customers want to pay more They work to segment their customers into price sensitive and price insensitive How firms set prices We begin with understanding the Value Proposition The “Value Proposition”...
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This note was uploaded on 02/05/2011 for the course BUSINESS 10 taught by Professor Johnsmith during the Fall '10 term at UCLA.

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m1l5 - David Robinson © D Robinson 2010 Fall 2010 Module 1...

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