MKT 100 Lecture Notes - Lecture 21: Retail, Oligopoly, List Price

• School: Ryerson University
• Department: Marketing
• Course: MKT 100
• Professor: Yanina Chevtchouk

Document Summary

Deciding what to charge depends on company objectives, consumer preferences, company costs, type of comepttition, and goals of channel members. May have a target return it needs to make. E. g. wholesalers and retailers send a % margin as guide for setting prices for next level of distribution channel o. Maximize profit - happens with a brand new product in a market with little competition o o. Skimming: setting high initial price for new product to recover from r&d costs. High prices speaks to consumer preferences bc it indicates high quality and cutting edge innovative o o o. High prices curtails demands so production capacity can keep up. Flexibility to lower price later which is easier than raising the price later. New product has distinctive features strongly desired by the consumers. Product is in early stages and lower prices wont produce greater total. 2. revenue bc of the relative lack of product awareness, its features and benefits.