Marketing chap 13 and 14

Marketing chap 13 and 14 - Pricing value that customers...

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Pricing – value that customers give up or exchange to obtain a desired product. Payment: money, goods, services, favors, votes, anything that has value to other party. Opportunity cost: value of something that is given up in return for something else Step 1 Sales objectives – maximize sales Market share objectives – increase market share Profit objectives – target level of profit growth, manage long term growth, maximize current profits short term Unit Volume – quantity produced Survival – mere survival of the firm Social responsibility – forgoes some profit in order to recognize its obligation to consumers and society Type of competitive market 1. Pure competition: many buyers and sellers, uniform commodity (agriculture), price is largely a function of supply and demand 2. Monopolistic competition: many buyers and sellers, differentiation of product: service, quality, style, features. More price flexibility 3. Oligopoly: Few sellers, very sensitive to pricing within the industry. Ex: airline. Price leadership strategy – one firm sets the price, others follow 4. Pure monopoly: one seller, often regulated. Ex: Virginia Dominion Power. Less pricing flexibility Step 2 Demand – customers desire for a product, how much does the customer want? How will it change as price goes up or down? Influences on price: shifts in demand 1. Availability of substitute goods and services – if a product has a close substitute, we can say that it has elastic demand 2. Changing consumer tastes 3. Income effect: less elastic (inelastice) the higher the income of the consumer Estimating demand -Total market demand = number of buyers/potential buyers times average amount each member
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This note was uploaded on 04/09/2012 for the course MKTG 311 taught by Professor Carpenter during the Spring '12 term at Old Dominion.

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Marketing chap 13 and 14 - Pricing value that customers...

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