MKTG 3101 Lecture Notes - Lecture 13: Price Ceiling
Document Summary
Narrowly defined, price is the amount of money charged for a product or service. Broadly defined, price is the sum of all the values that customers give up to gain the benefits of having or using a product or service. Major pricing strategies (value-based pricing, cost-based pricing, completion-based pricing) A firm sets prices after studying consumer desires and finding a range of prices acceptable to target market. It begins with selling price and works backward to cost variables. It identifies a price ceiling or maximum customer will pay for a good or service: good-value pricing: offer the right combo of quality and good service at a fair price. High-low pricing: charging higher prices, but with frequent promotions: value-added pricing: add features and services to differentiate from competitors. To set prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk.
