Session 13 - Pricing 1

Session 13 - Pricing 1 - Pricing 1 Session 13 Introduction...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Pricing 1 Session 13 Introduction to Marketing Professor Greenleaf Fall 2011
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Session 11 – Pricing 1 2 Today’s Agenda Start marketing mix Why is pricing strategy important? Cost plus pricing Value-based pricing Dynamic pricing Competitive pricing
Background image of page 2
Session 11 – Pricing 1 3 Today we begin discussing the marketing mix – “Four Ps” Marketing Mix – What actions will we use in the marketplace to implement our marketing strategy? Pricing Product Partnerships Promotion (Communication)
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Session 11 – Pricing 1 4 Why is Price Important? Price is how firms earn revenue create cash flow make a profit Most other marketing activities use cash Pricing too high or too low can cost a firm profits Possible to have high sales but low profits Today we’ll start with a simple pricing approach, then get more sophisticated
Background image of page 4
Session 11 – Pricing 1 Pricing mistakes can be costly 5 NYT 9.15.11
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Session 11 – Pricing 1 Pricing mistakes can be costly 6 NYT 10.10.11
Background image of page 6
Session 11 – Pricing 1 7 Goodyear gas-saving tires for cars – Assurance Fuel Max New Goodyear industrial truck tire has advantage over existing tires Better gas mileage - 12MPG vs. 10 MPG What price should Goodyear set for the new tire? Goodyear sells tire directly to end users Contractors and construction firms that use trucks Truck manufacturers
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Session 11 – Pricing 1 8 Pricing the Assurance Fuel Max tire for large trucks Suppose Goodyear introduces Fuel Max for large industrial trucks Better gas mileage - 12MPG vs. 10 MPG What price should Goodyear set for the new Fuel Max large truck tire? Goodyear sells tire directly to end users Contractors and construction firms that use trucks Truck manufacturers
Background image of page 8
Session 11 – Pricing 1 9 Cost Plus Pricing Price = cost + Goodyear’s % margin on cost Cost = $200, margin on cost = 60% So margin = $200 * 60% = $120 Price = $200 + $120 = $320 *4 = $1280 per set of 4 Cost plus pricing is simple Still found in many industries Supermarkets and drugstores Industrial suppliers Many firms have “tradition” of cost plus
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Session 11 – Pricing 1 10 Cost Plus Pricing But: Even cost plus pricing is difficult Costs often not easy to determine
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/05/2012 for the course STERN MKTG-UB.1. taught by Professor Greenleaf during the Fall '11 term at NYU.

Page1 / 45

Session 13 - Pricing 1 - Pricing 1 Session 13 Introduction...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online