odd pricing for customer to perceive lower prices Uchi vs chic fil a cars o

Odd pricing for customer to perceive lower prices

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(odd pricing for customer to perceive lower prices) (Uchi vs. chic-fil-a, cars) o Target pricing : manufacturer deliberately adjusts features/composition of product to achieve target price to consumers (Cannon cameras)— estimate price ultimate consumer will pay and work backward to determine price to charge retailers/wholesalers (adjust product as needed to get us to target price) o Bundle pricing : market 2+ products in single package price—based on idea consumers value package more than individual items, often provides lower total cost to buyers and lower marketing costs to sellers (common in services: flight and hotel transfer, tours, etc) o Yield management pricing : charge different prices to maximize revenue for set amount of capacity at any given time—varying prices based on time, day, week, or season to match demand/supply (Megabus, Uber, airlines, hotels, apartments) Cost-oriented pricing : stress cost side of pricing problem, look at production/marketing costs and add enough to cover direct expenses, overhead, and profit (usually used as standard % markup businesses chooses, most common in small business retail environments) convert percent to decimal in calculating o Standard markup pricing : add fixed percentage to costs of all items in specific product class (supermarkets, retail stores) markup depends on type of store (grocery/furniture/clothing) and product involved (smaller markups for high-volume products) markups cover expenses, pay overhead costs, and contribute to profits (movie theater markups tickets vs. concessions) o Cost-plus pricing : summing total unit costs of providing product/service and add specific amount to arrive at a price (most commonly used for business products) calculate cost and materials and standard amount of labor hours and overhead which gives total costs and you either tack on set fee or markup strategy (common in B2B) Profit-oriented pricing : balance revenues and costs, involves target of specific dollar volume of profit/express target profit as percentage of sales/investment o Target profit pricing : firm sets annual target of specific dollar volume of profit, depend on revenue and costs, depends on accurate demand estimate, best for firms offering unique/new product without much competition (common in small businesses) (total costs divided by units sold)
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o Target return-on-sales pricing : profit specified as percentage of sales volume (grocery stores) take percent of revenue and set prices according to a percent of revenue you want to take home o Target return-on-investment pricing : set prices to achieve ROI target (percentage mandated by board of directors/regulators) ( large capital investments, take capital investment times target rate of return, add with fixed costs…) Competition-oriented pricing : stress what’s being done by competitors/in the market o Customary pricing : product price dictated by tradition, standardized distribution channel, or other competitive factors (candy bars in vending machines) charging what people are “used to paying”
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