BSB126 Lecture Notes - Lecture 5: Emotional Contagion, Product Lifecycle, Marketing Mix
Marketing – Pricing and Distribution
- Pricing
oHow money and the perception of money/spending influences behaviour
oMarketers should manage value, not money
oShould be consistent with the other elements of the marketing mix
oHow organisations capture value
oEasiest for competitors to either match or beat
oPrice focused customers are less loyal
oMost flexible element
oBeing too cost oriented doesn’t allow the organisation to capture all the value that
exists
oCustomer value
Functional value
What does it do?
Monetary value
Psychological value
oConstraints
Can’t continue to price goods below costs
Can’t sell products in other countries below cost
Demand for the product class, product, and brand
Newness of the product – stage in the product cycle
Single product versus a product line
Cost of producing and marketing the product
oChange frame of reference allows companies to charge higher for a similar product
oImportant for
Survival
Maximising current profit/marketshare
Maximising sales growth/volume
Maximising competitors’ prices
Prestige/price quality leadership
Market skimming or penetration
find more resources at oneclass.com
find more resources at oneclass.com
Social responsibility
oAnalyse target market’s expectation or evaluation of price and quality
oForecast market demand trends
oApproaches
Skimming pricing
Highest initial price customers really desiring to buy the new
product are willing to pay
Grab as much profit as you can
Generally used when introducing a new product
Penetration
Setting a low initial price on a new product to appeal immediately to
the mass market
Grab as much market share as you can
Used to manipulate loyal customers into buying more
Prestige Pricing
Set high price to attract status conscious customers
Bundle Pricing
Marketing two or more products together in a single package
Yield Management Pricing
Charging different prices for the same product to maximise revenue
for a set amount of capacity at any given time
Extracting as much value
Perishable
People who pay just before expiry are willing to pay more
Value Pricing
Reflects the customer’s perception of value for money over the life
of the product
Primarily industrial products
Total cost of ownership
Looks at all price, not just initial price
Relativity
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Can"t sell products in other countries below cost. Demand for the product class, product, and brand. Newness of the product stage in the product cycle. Cost of producing and marketing the product: change frame of reference allows companies to charge higher for a similar product, important for. Social responsibility: analyse target market"s expectation or evaluation of price and quality, forecast market demand trends, approaches. Highest initial price customers really desiring to buy the new product are willing to pay. Grab as much profit as you can. Generally used when introducing a new product. Setting a low initial price on a new product to appeal immediately to the mass market. Grab as much market share as you can. Used to manipulate loyal customers into buying more. Set high price to attract status conscious customers. Marketing two or more products together in a single package.
