MM1 - Lecture 18 - Nov1 2011 -OnCourse

MM1 - Lecture 18 - Nov1 2011 -OnCourse - Pricing &...

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Unformatted text preview: Pricing & Channels Marketing Management 1 November 1, 2011 Learning Objectives n Finish discussion of Pricing Strategies n Explain what a marketing channel is and why channels are needed. n Describe and understand channel structures. Factors Affecting Pricing Decisions Internal Factors Marketing Objectives Marketing Mix Strategy Costs Extern Marke Dema Comp Enviro Factors to Consider When Setting Price n Internal Factors q Marketing objectives q Marketing mix strategy q Costs q Product considerations n Market positioning influences pricing strategy n As pricing objectives can be different: q Survival q Profit maximization q Market share leadership q Product quality leadership Factors to Consider When Setting Price n Internal Factors q Marketing objectives q Marketing mix strategy q Costs q Product considerations n Pricing must be carefully coordinated with the other marketing mix elements n Pricing is often used to support product positioning strategies Factors to Consider When Setting Price n Internal Factors q Marketing objectives q Marketing mix strategy q Costs q Product considerations n Costs set the floor, or lowest amount that should be charged n Ideally, prices charged cover all costs and leave something left over for profit n Types of costs: q Variable q Fixed q Total costs n How costs vary at different production levels will influence price setting Factors to Consider When Setting Price n Internal Factors q Marketing objectives q Marketing mix strategy q Costs q Product considerations n Product Characteristics often define pricing q Product Positioning q Product stage in life-cycle q Existing product line Factors to Consider When Setting Price n External Factors q Nature of market and demand q Competitors costs, prices, and offers q Other environmental elements n Types of markets q Pure competition q Oligopoly/ Monopolistic competition q Pure monopoly n Consumer perceptions of price and value n Price-demand relationship q Demand curve q Price elasticity of demand Source: Table 13-2, Crane et al. Factors to Consider When Setting Price Factors to Consider When Setting Price n External Factors q Nature of market and demand q Competitors costs, prices, and offers q Other environmental elements n Consider competitors costs, prices, and possible reactions when developing a pricing strategy n Pricing strategy influences the nature of competition q Low-price low-margin strategies inhibit competition q High-price high-margin...
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This note was uploaded on 11/23/2011 for the course MGCR 2049 taught by Professor Edwardbierbrier during the Fall '10 term at McGill.

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MM1 - Lecture 18 - Nov1 2011 -OnCourse - Pricing &...

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