MMK101 Lecture Notes - Lecture 7: Ebay, E.G. Time, Price Ceiling
Document Summary
In the competitive market place, value seeking customers have put increased pricing pressure on companies. Cutting prices is not always the best solution. It erodes profits, contributes to damaging price wars and has the potential to erode brand value. Price is the amount of money that we charge for a product or service. (narrow definition). Price is the sum of all the values that consumers have to give up in order to gain the benefits of having or using a product or service. E. g. time of trying on clothes, cost of washing detergent. Price ceiling = consumer perceptions of product value set the ceiling for prices. Price floor = product costs set the floor for prices. In setting prices between the ceiling and the floor, the company must consider a range of internal and external factors, including (cid:272)o(cid:373)petitor(cid:859)s pri(cid:272)es, the (cid:272)o(cid:373)pa(cid:374)y(cid:859)s overall (cid:373)arketi(cid:374)g strategy a(cid:374)d the nature of supply and demand.
