CH-19&20 PPT

CH-19&20 PPT - Ch. 19 & 20: Pricing Strategy...

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© 2011 Robert H. Smith School of Business University of Maryland Pricing Strategy Professor Whitney Fall 2011
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© 2011 Robert H. Smith School of Business University of Maryland The Marketing Process Situation Analysis Situation Analysis Customers, Company, Competitors, Collaborators, Context (PEST) Customers, Company, Competitors, Collaborators, Context (PEST) Situation Analysis Situation Analysis Customers, Company, Competitors, Collaborators, Context (PEST) Customers, Company, Competitors, Collaborators, Context (PEST) S S Segment the  Market T T Target Market Selection P P Position Product/Service Marketing Research Marketing Mix (4 P’s) Marketing Mix (4 P’s) Product/Service Product/Service Place/Channels Place/Channels Promotion Promotion Pricing Pricing Marketing Mix (4 P’s) Marketing Mix (4 P’s) Product/Service Product/Service Place/Channels Place/Channels Promotion Promotion Pricing Pricing Profits
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© 2011 Robert H. Smith School of Business University of Maryland General Pricing Framework Pricing Strategy & Price Level Internal Factors Positioning Strategy Pricing objectives Supply Product Life Cycle Cost Structure External Factors Target Market’s perceptions Demand Demand Elasticity Competition Legal aspects
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© 2011 Robert H. Smith School of Business University of Maryland Pricing Objectives Set Price to Increase Market Share or Sales Volume Set Price to Increase Profitability Set Price to be Competitive
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© 2011 Robert H. Smith School of Business University of Maryland Impact of Pricing on Sales vs. Profitability Profitability Market Share % Change Market Demand 200 200 0% (millions units) Price (per unit) $6.00 $5.40 -10% Volume (millions) 40 50 25% Market Share (units) 20% 25% 25% Sales Revenues (mil.) $240 $270 12.5% Unit Cost $4.00 $4.00 0% Unit Margin $2.00 $1.40 -30% Tot. Contrib. (mill.) $80 $70 -12.5%
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© 2011 Robert H. Smith School of Business University of Maryland Cost Based vs. Market Based Pricing Cost Based Pricing Set price based on costs. Market Based Pricing
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This note was uploaded on 02/01/2012 for the course BMGT 350 taught by Professor Boyd during the Fall '08 term at Maryland.

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CH-19&20 PPT - Ch. 19 & 20: Pricing Strategy...

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