o Social Responsibility A firm may forgo higher profit on sales and follow a

O social responsibility a firm may forgo higher

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oNewness of the product (stage in the PLC):The newer a product and the earlier it is in its cycle, the higher is the price that can usually be charged.oCost of producing and marketing the product:Another profit consideration for marketers is to ensure that firms in their channels of distribution make an adequate profit. Without profits for channel members, a marketer is cut off from its customers. oCompetitors’ prices:oLegal and ethical considerations: Setting a final price is clearly a complex processPrice Fixing: A conspiracy among firms to set prices for a product for a product is termed price fixing. Is illegal under the Sherman Act. Horizontal:When 2 or more competitors collude to explicitly or implicitly set prices.Vertical:Controlling agreements b/w independent buyers and sellers whereby sellers are required to not sell products below a min. retail price. Price Discrimination: The practice of charging different prices to different buyers for goods or like grade and quality. However, not all price differences are illegal; only those that substantially lessen competition or create a monopoly are deemed unlawful.Deceptive Pricing: Price deals that mislead consumers fall into the category of deceptivepricing, is outlawed by the Federal Trade Commission. Predatory Pricing:The practice of charging a very low price for a product with the intentof driving competitors out of business. Once competitors have been driven out, the firm raises its prices.16. 3 steps in setting a final priceoStep 1: Select an Approximate Price LeveloStep 2: Set the List or Quoted PriceOne Price or Flexible Price PolicyoStep 3: Make Special Adjustments to the List of Quoted PriceDiscounts: Quantity, Seasonal, Trade (Functional), CashAllowances: Trade-in, Promotional17. One-price policy vs. flexible-price policyoOne-price policy: Also called fixed pricing, is setting one price for all buyers of a product or service. oFlexible-price policy: Involves setting different prices for products and service depending on individual buyers and purchase situations in light of demand, cost, and competitive factors.18. Types of discounts and allowancesoDiscounts: Reductions from list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller.Quantity:To encourage customers to buy larger quantities of a product, firms at all levels in the channel of distribution offer quantity discounts.Seasonal:To encourage buyers to stock inventory earlier than their normal demand would require, manufactures often use seasonal discounts.
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