COMM 223 Lecture Notes - Lecture 11: Psychological Pricing, Dynamic Pricing, Geographical Pricing
23 Jan 2017
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Document Summary
Price the amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service. Product costs (price floor=no profits below this price) Consumer perception of value (price ceiling=no demand above this price) Experience curve (learning curve) the drop in the average per-unit production cost that comes with accumulated production experience. Cost-plus pricing adding a standard markup to the cost of the product. Break-even pricing (target profit pricing) setting price to break even on the costs of making and marketing a product, or setting price to make a target profit. Target costing pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met. The market and demand: pure competition many buyers and sellers trading in a uniform commodity such as wheat. No seller has much effect on the going market price.
