Intro Mktg - 08 - Pricing - ch 11

Intro Mktg - 08 - Pricing - ch 11 - MKTG 2270 CHAPTER 11...

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1 PRICING 11 C HAPTER MKTG 2270 March 4, 2007
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2 Price: The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service. What is a price?
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3 Price Has Many Names Rent Fee, Fare Rate Commission Tuition Toll Premium Retainer Bribe Salary Wage Interest
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4 The Impact of the Internet on Pricing Dynamic Pricing: Charging different prices depending on individual customers and situations Dynamic pricing on the Web allows SELLERS to: Monitor customer behavior and tailor offers. Change prices on the fly to adjust for changes in demand or costs. Aid consumers with price comparisons. Negotiate prices in online auctions and exchanges.
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5 Factors Affecting Pricing Decisions: Internal Marketing Objectives - Market positioning of the product influences pricing strategy - Pricing objectives Profit oriented (Current or Long-run profits) Sales oriented (Market share)
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6 Factors Affecting Pricing Decisions: Internal Marketing Mix Strategy - Pricing must be coordinated with the other marketing mix element - Target costing is to support product positioning strategies based on price
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Factors Affecting Pricing Decisions: Internal Costs -Costs set the floor, or the lowest amount that could be charged -Fixed costs (Overhead) : Do not vary with production or sales level (e.g., rent, heat, executive salaries) -Variable costs : Varies directly with the level of production -Total costs : The sum of fixed and variable costs at a
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Intro Mktg - 08 - Pricing - ch 11 - MKTG 2270 CHAPTER 11...

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