BUSI 2204 Lecture Notes - Lecture 11: Pricing Strategies, Price Skimming, Geographical Pricing
19 Jun 2015
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Busi 2204 chapter 11 notes: price (cid:0) is the only element of the marketing mix that generates revenue. Every other element in the marketing mix may be perfect, but with the wrong price, sales simply will not occur. Research has consistently shown that consumers usually rank price as one of the most important factors in their purchase decisions. Profit orientation (cid:0) focuses on target profit pricing, maximizing profits or target return pricing. Target profit pricing: a particular profit goal as their overriding concern. To meet this targeted profit objective, firms use price to stimulate a certain level of sales at a certain profit per unit. Maximizing profits (cid:0) a firm relies primarily on economic theory. If a firm can accurately specify a mathematical model that captures all the factors required to explain and predict sales and profits, it should be able to identify the price at which its profits are maximized.
