0324536380_77288

0324536380_77288 - CHAPTER18 Pricing Concepts Chapter...

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Chapter Objectives Pricing Concepts CHAPTER    18 1 2 4 7 8 Outline the legal constraints on pricing. Identify the major categories of pricing objectives. Explain price elasticity and its determinants. List the practical problems involved in applying price theory concepts to actual pricing decisions. Explain the major cost- plus approaches to price setting. List the chief advantages and shortcomings of using breakeven analysis in pricing decisions. Explain the use of yield management in pricing decisions. Identify the major pricing challenges facing online and international marketers. 5 3 6
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CHAPTER 18 Pricing Concepts PRICING AND THE LAW  • Federal, state, and local laws all influence pricing decisions. • Tariffs levied on imported goods and services can help firms protect local markets. • Government regulation also imposes costs that affect prices. Robinson-Patman Act Federal legislation prohibiting price discrimination that is not based on a cost differential; also prohibits selling at an unreasonably low price to eliminate competition. Unfair-trade laws State laws requiring sellers to maintain minimum prices for comparable merchandise. Fair-trade laws Statutes enacted in most states that once permitted manufacturers to stipulate a minimum retail price for their product. • Fair-trade laws eventually invalidated by the 1975 Consumer Goods Pricing Act.
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CHAPTER 18 Pricing Concepts PRICING OBJECTIVES AND THE MARKETING MIX  Organizational objectives and more specific marketing objectives guide the development of pricing objectives. Profit maximization Point at which the additional revenue gained by increasing the price of a product equals the increase in total costs. Target-return objective Short-run or long-run pricing objectives of achieving a specified return on either sales or investment. Profit Impact of Market Studies (PIMS) project
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0324536380_77288 - CHAPTER18 Pricing Concepts Chapter...

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