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kotcha10 - Chapter10 PricingProducts Approaches 1 Price...

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1     Chapter 10 Pricing Products: Pricing Considerations and  Approaches 
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2 Price Price  is the sum of all the values that consumers  exchange for the benefits of having or using the  product or service. Price has been the major factor affecting buyer  choice; nonprice factors have become  increasingly important in buyer-choice behavior. Price is the only element in the marketing mix  that produces revenues; all others represent  costs.
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3 Factors Affecting Price  Decisions ( Fig. 10.1)             Internal Factors Marketing Objectives Marketing Mix Strategy Costs Organizational    considerations External Factors Nature of the market   and demand Competition Other environmental   factors (economy,    resellers, government)   Pricing Decisions
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4 Marketing Objectives Survival Low Prices to Cover Variable Costs and Some Fixed Costs to Stay in Business. Current Profit Maximization           Choose the Price that Produces the  Maximum Current Profit, Etc. Market Share Leadership Low as Possible Prices to Become the Market Share Leader. Product Quality Leadership High Prices to Cover Higher  Performance Quality and R & D. Internal Factors Affecting Pricing  Decisions: Marketing Objectives
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5 Internal Factors Affecting Pricing  Decisions: Marketing Objectives Other specific objectives include: Set prices low to prevent competition from entering the  market, Prices might be reduced temporarily to create  excitement or draw more customers.
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