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BUSI 107 2009 Fall Study Outline III

BUSI 107 2009 Fall Study Outline III - BUSI107...

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BUSI 107  Study Outline III, Chapters 13-16 Fall 2009 Chapter 13:  “Pricing Concepts for Establishing Value”  Understand that “price” is exchanged for something of value – the bundle of attributes and  experiences that comprises the offer.  Price can be money, effort, or bartered goods or  services Note that price is tied to revenue, whereas most other aspects of marketing are tied to costs Price is set between the upper limits of demand (ceiling) and costs (floor)  Pricing should  reflect the “5Cs” of pricing: customers, costs, competition, company objectives and channel  members Company objectives may be profit-oriented, sales-oriented, competitor-oriented, or  customer-oriented Review concept of demand curve; price elasticity of demand  Understand idea of “inverse demand” Competitive market structure and its influence on pricing: pure competition, monopolistic  competition, oligopoly, monopoly Price wars – conditions that favor them; why they should be avoided Know the difference between price and non-price competition (i.e., differentiating on some  basis other than price).  Good marketers strive to avoid price competition whenever possible  unless they have a significant and sustainable cost advantage vs. their competitors.
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