MKT 100 Lecture Notes - Lecture 12: List Price, Retail
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MKT 100 Full Course Notes
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Company may have a target return that it needs to make. Maximize profits, brand new product in a new market. Setting a high initial price for a new product to cover the research and development costs. Gaining a large market share at a low price discourages others from entering into the market. Companies don"t want to compete on price thus follow a leader. Brands are competing on image, features and benefits. Reductions offered as financial incentives to stock the product in advance of the season. Manufacturer can reduce the amount of inventory they may have to stock prior to peak season. Reduction on the invoice the buyer pays promptly. Getting money earlier allows the seller to pay bills, invest or avoid borrowing costs. Price reductions for marketing functions the buyer undertakes for the seller. Advertising allowances may be cash payments or a discount for featuring the manufacturers product and promotion.