MKT 100 Lecture Notes - Lecture 10: Price Skimming, Predatory Pricing, Premium Pricing

• School: Ryerson University
• Department: Marketing
• Course: MKT 100
• Professor: Martin Pyle

Document Summary

A complex issue: requiring analytical and strategic thinking, can be called tuition and strategic thinking, generally money is exchanged, sometimes not money (cid:523)goods, services (cid:524) Price is a signal: prices can be both too high and too low, price too low may signal poor quality, price set too high might signal low value. Role of price in the marketing mix: price is usually ranked as one of the most important factors in purchase decisions, price is the only element in the marketing mix that generates revenue. The 5 c"s of pricing: competition, costs, company objectives, customers, channel members. Target profit pricing: sales orientation, competitor orientation, customer orientation. 2nd c: customers: prestige product or services. Those that consumers purchase for status rather than functionality: price elasticity of demand. Elastic (price sensitive)e. g. restaurant, chocolate, jewelry, etc . Consumers less sensitive to price increases for necessities. Inelastic (price insensitive) e. g. milk, eggs, gasoline etc .