BUSI 406_Mar 15

BUSI 406_Mar 15 - Pricing BUSI 406 Session 18 Mar 15 2010 9...

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Pricing BUSI 406 Session 18 Mar 15 2010
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9 2 BUSI 406  Spring  2010 Discuss the importance of understanding customer- value perceptions and company costs when setting  prices. Identify and define the other important internal  and external factors affecting a firm’s pricing  decisions. Describe the major strategies for pricing imitative  and new products. Explain how companies find a set of prices that  maximizes the profits from the total product mix. Discuss how companies adjust their prices to take  into account different types of customers and  situations. Discuss key issues related to initiating and  responding to price changes. Rest Stop:   Previewing the Concepts
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9 3 BUSI 406  Spring  2010 What Is a Price? Narrowly defined,  price is the amount of money  charged for a product or service. Broadly defined,  price is the sum of all of the  values that consumers give up in order to gain  the benefits of having or using the product or  service.
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9 4 BUSI 406  Spring  2010 Factors to Consider When Setting Price Customer perceptions of value Price ceiling inhibits demand Product costs No profits are available below the price floor Other internal and external considerations: Marketing strategy, objectives, mix Nature of the market and demand Competitors’ strategies and prices
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9 5 BUSI 406  Spring  2010 Customer Perceptions of Value Value-based pricing: Uses buyers’ perceptions of value, not the seller’s  cost, as the key to pricing. Price is considered along with the other marketing  mix variables before the marketing program is set. Types of value-based pricing: Good value pricing Value-added pricing
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9 6 BUSI 406  Spring  2010 Internal Factors Affecting Pricing Decisions Cost-based pricing: Price = costs + rate of return Fixed costs: Costs that do not vary with production or sales level. Variable costs:
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This note was uploaded on 02/27/2012 for the course BUSI 407 taught by Professor Bowen during the Spring '11 term at UNC.

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BUSI 406_Mar 15 - Pricing BUSI 406 Session 18 Mar 15 2010 9...

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