MKTG101 Lecture Notes - Lecture 8: Perfect Competition, Marginalism, Price Skimming
27 Aug 2018
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Document Summary
Management of price is called pricing and is based on overall organisational objectives. Price is a measure of value to both buyers and sellers. Buyers see price as a measure of benefit, sellers need prices to cover cost and provide profits. Price is a major determinant of sales volume. In turn, sales volume influences cost, both per unit sold and the production cost of each unit. Satisfaction derived from the consumption or ownership of the product. Some are motivated by higher prices, believing that these reflect higher quality of product (price seeking) Others seek lower prices for greater value (price aversion) Pricing objectives should be specific, measurable, actionable, reasonable and timetables. Rewards business owners for risk taken in vesting in business. Prices must exceed cost > break even point. The profit required to justify investment in a particular product or project. Min. acceptable level of profitability for new products.
