COMM 131 Lecture Notes - Lecture 15: Geographical Pricing, Price Ceiling, Price Floor
20 Mar 2018
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Document Summary
Narrow definition: the amount of money charged for a product or service. Broad definition: the sum of all values that consumers exchange for the benefits of having or using the product or service. Price is simply one aspect of consumer"s perception of value. Only element of the marketing mix to produce revenues. Long term effects of sales promotions are generally negative. Price ceiling: customer perceptions of value (no demand above this price) Price floor: product costs (no profits below this price) Set price based on costs for producing, distributing, and selling product, plus a fair mark up for effort and risk. Uses buyers" perceptions of value rather than seller"s costs to set the price. Set target price to match customer perceived value (wtp) Design product to deliver desired value at target price. High initial prices to skim revenues from the market. Product quality and image support a higher price.
