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Module9 - Price and Pricing Introduction When you are...

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Price and Pricing Introduction When you are thinking about buying something, what are some of your first considerations that might influence your decision? You probably think about the benefits you'll get from buying the product, and maybe consider the kinds of product differentiators we've talked about, like quality, design, and product features. You might consider the availability of the product -- would you have to wait for the product, or do you have travel some distance to get it? You might also consider support services and the reputation of the brand or brands that offer that product. Those are all important, but we're still missing one of the most critical factors influencing purchasing decisions. You guessed it (right?) -- the piece we've missed so far is price. Would you pay $100 for a stick of gum? If you would, it would probably have to be one amazing stick of gum. Are you in the market for a new car? If you could get the same exact car from either of two dealerships, across the street from each other, but you could pay $2,000 less at one of the dealerships, do you think you'd be more likely to buy the car from that dealer? Unless you know you'll receive far superior service from the dealership with the higher price, you're likely to lean toward the lower-priced vehicle. In this module, we'll consider the important role of pricing in the marketing mix. And we'll look at how marketers determine price and use pricing as a key tool for competing in the marketplace, differentiating a company or product, and incentivizing desired behaviors in potential customers. Student Outcomes Understand why price is an important part of the marketing mix. Learn about the different kinds of costs incurred by businesses and the impact those costs may have on pricing. Understand the relationship between price and demand and how that relationship influences pricing. Have an arsenal of pricing strategies you can apply to your Final Project and as a marketer in the real world. Assignments Read: Pricing High and Proud of It Assignment 9.1: Final Project -- Choose an Industry Assignment 9.2: Final Project -- Consumer Survey
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The Factors that Influence Pricing Price is what buyers must give up in order to gain the benefits of having or using a product or service. When we talk about price in this class, we'll almost always be talking about the amount of money that customers must pay in order to acquire a product. Price is the only element in the marketing mix that produces revenue for companies; all others represent costs. Since it is directly tied to company revenues, price is one of the most important elements in determining a company's profitability. There are many factors that marketers must consider when pricing their products and services. Let's look at some of those factors.
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