MCS 1000 Chapter 13: Pricing Products and Services
16 Feb 2017
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Price: money or other considerations (including other goods and services) exchanged for the ownership or use of a good or service (vs bartering) Consumer perspective: price used to indicate value when it is compared with the benefits of the product. Value: the ratio of perceived benefits to price. Value pricing: increasing product or service benefits while maintaining or decreasing price. Price has direct effect on a firm"s profits. Profit = (unit price x quantity sold) - total cost. Pricing constraints relate to conditions existing in the marketplace while pricing. Legal restrictions, internal/external restrictions objectives relate to conditions existing in the marketplace. Demand for the product class, product and brand. The number of potential buyers for the product class (cars), product (sports cars) and brand (dodge viper) affects the price a seller can charge. Newness of the product: stage in the product life cycle. Newer a product and the earlier it is in its life cycle higher the price will be.
