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Pricing - Pricing Pricing Pricing strategies Price and...

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Pricing
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Pricing Pricing strategies Price and break-even analysis Price elasticity
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Pricing Strategies Cost-based pricing Competitor-based pricing Customer-based pricing
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Cost-based pricing Cost-plus pricing/ Mark-up pricing Price = Unit Cost + %Mark-up Price = Unit Cost 1 - Mark-up 10% 50%
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Competitor-based pricing Going-rate/premium/discount pricing
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Customer-based pricing Perceived-value pricing Value-in-use pricing
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http://agriculture.newholland.com/us/en/Pages/homepage.aspx Price?
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Economic Value Reference Product Final Price John Deere $25,000 New Holland $25,000+$2000+$2000+ $1000=$30,000 Less fuel = $2000 Hi tech system save 100 farmer hours (@ $20/hr)= $2000 Superior air conditioning, Bose stereo = $1000 Value-in use pricing approach
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At Break-Even Volume ( V )… Total Revenue = Total Cost Price * V = Fixed cost + Variable cost Suppose fixed cost is fc and variable cost per unit is vc… Price * V = fc + vc * V Breakeven Volume V = fc Price - vc Break-Even Analysis
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Break-Even Analysis Dollars ($000) 1,500 1,250 1,000 750 500 250 0 10 20 30 40 50 (31,250)
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