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23 download_doc.php - Class 10 I. Types of pricing...

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Class 10 I. Types of pricing strategies a. Product line pricing i. Price jumps based on features ii. Consider the relationship of item to others in the line and that of its competitors b. Price bundling i. Selling two or more products for a single price 1. Ex: iphone and service ii. Multiple items for single price iii. When two or more products work well together c. Captive product pricing i. Two or more products that work only when used together 1. Ex: razors ii. There is a low entry price 1. The margin comes from the repeat purchase d. Optional product pricing i. Car upgrades II. Price elasticity of demand a. Price promotion i. Doesn’t work when demand is inelastic 1. PED < 1 ii. Works when demand is elastic 1. PED >1 III. Types of price changes
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a. Discounts i. Liquidation’s big offering b. Allowances i. Usually tied to an action you want a trade partner to participate in ii. Ex: sony to best buy 1. 2 % discount if you pay early iii. Not a good idea if company you are offering c. Rebates
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This note was uploaded on 04/18/2011 for the course BUS 370 taught by Professor Camp during the Fall '09 term at Indiana.

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23 download_doc.php - Class 10 I. Types of pricing...

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