MCS 1000 Lecture Notes - Lecture 13: Heinz Tomato Ketchup, Monopolistic Competition, Demand Curve

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 1000
• Professor: Raffi Sarmazian

Document Summary

Value = ratio of perceived benefits to price; as perceived benefits increase, perceived value increases. Value pricing = increasing product or service benefits while maintaining or decreasing price. Reference value = involves comparing the prices and benefits of substitute items. Intense competition in many industries has led to lower prices for consumers. Profit equation = total revenue total cost, or profit or. Profit equation = (unit price x quantity sold) total cost. P(cid:396)i(cid:272)e has a di(cid:396)e(cid:272)t effe(cid:272)t o(cid:374) a fi(cid:396)(cid:373)"s p(cid:396)ofits; >>>>>identifying pricing constraints= factors that limit the latitude of price a firm may set. A)-demand for the product class, product and brand= number of potential buyers for the product class, products, brand, whether the item is luxury or a necessity. Examples: water and electricity companies; microsoft in pc operating systems: oligopoly: the auto industry is another example of an oligopoly, with the leading auto manufacturers in the united states being ford (f), gmc, and chrysler.