AFM131 Lecture Notes - Lecture 15: Podcast, Telemarketing, Psychological Pricing

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM131
• Professor: David H A

Document Summary

Customers look at benefits and then subtract the price to see if b>c. Marketers must use a creative mix of branding, pricing, advertising, and packaging (value enhancers) to create a unique or attractive image. Model of what happens to sales and profits for a product class over time. Different stages calls for multiple marketing mix changes. Pricing objectives: achieving a target return on investment or profit, building traffic, achieving greater market share, creating an image, furthering social objectives. Cost based pricing: producers often use cost as a primary base for setting the price, develop elaborate cost accounting systems to measure production costs (materials, labour, and overhead)- add a margin of profit and come up with price. In the long run the market not the producer determines the price. Process used to determine profitability at various levels of sales. Price of one unit variable cost of one unit.