Outline of Chapter 17

Outline of Chapter 17 - Outline of Chapter 17 PRICING...

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Outline of Chapter 17 PRICING OBJECTIVES AND POLICIES INTRODUCTION PRICE HAS MANY STRATEGY DIMENSIONS Transparency 109 (Exhibit 17-1) "Strategy Planning for Price" The price equation: price equals something of value PRICE--the amount of money that is charged for "something" of value. Overhead 180 (Exhibit 17-2) "Price as Seen by Consumers or Users" Overhead 181 (Exhibit 17-3) "Price as Seen by Channel Members" OBJECTIVES SHOULD GUIDE STRATEGY PLANNING FOR PRICE Transparency 110 (Exhibit 17-4) "Possible Pricing Objectives" PROFIT-ORIENTED OBJECTIVES Target returns provide specific guidelines TARGET RETURN OBJECTIVE--a specific level of profit as an objective. Some just want satisfactory profits Profit maximization can be socially responsible PROFIT MAXIMIZATION OBJECTIVE--an objective to get as much profit as possible. SALES-ORIENTED
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OBJECTIVES SALES-ORIENTED OBJECTIVE--an objective to get some level of unit sales, dollar sales, or share of market--without referring to profit. Sales growth doesn't necessarily mean big profits Market share objectives are popular STATUS QUO PRICING OBJECTIVES Don't-rock-the-boat objectives STATUS QUO OBJECTIVES--"don't-rock-the-pricing-boat" objectives. Or stress nonprice competition instead NONPRICE COMPETITION--aggressive action on one or more of the Ps other than Price. MOST FIRMS SET SPECIFIC PRICING POLICIES--TO REACH OBJECTIVES Administered prices help achieve objectives ADMINISTERED PRICES--consciously set prices aimed at reaching the firm's objectives. PRICE FLEXIBILITY POLICIES One-price policy--the same price for everyone ONE-PRICE POLICY--offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities. Flexible-price policy--different
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prices for different customers FLEXIBLE-PRICE POLICY--offering the same product and quantities to different customers at different prices. Pricing databases make flexible pricing easier Salespeople can adjust prices to the situation Too much price cutting erodes profits PRICE LEVEL POLICIES--OVER THE PRODUCT LIFE CYCLE Skimming pricing--feeling out demand at a high price SKIMMING PRICE POLICY--trying to sell the top of the market--the top of the demand curve--at a high price before aiming at more price-sensitive customers. Skimming has critics Price moves down the demand curve Transparency 111 (Exhibit 17-5) "Alternative Introductory Pricing Policies" Penetration pricing--get volume at a low price PENETRATION PRICING POLICY--trying to sell the whole market at one low price. Introductory price dealing--temporary price cuts INTRODUCTORY PRICE DEALING--temporary price cuts to speed new products into a market. Different price level policies through the channel The price of money may affect the price level
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Overhead 182 (Exhibit 17-6) "Exchange Rates for Various Currencies Against the U.S. Dollar Over Time" MOST PRICE STRUCTURES ARE BUILT AROUND LIST PRICES Prices start with a list price BASIC LIST PRICES--the prices that final customers or
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This note was uploaded on 01/16/2012 for the course MKT 1137 taught by Professor Staff during the Spring '11 term at Villanova.

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Outline of Chapter 17 - Outline of Chapter 17 PRICING...

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