COMM 100 Lecture Notes - Sales Promotion, Ebay, Direct Market
Document Summary
Chapter 13 - pricing, promoting, and distributing products. Pricing objectives - the goals that sellers hope to achieve in pricing products for sale. Setting prices involves understanding how they contribute to achieving the firm"s sales objectives. Ex. ebay pricing structure: let buyers make offers until a price is finally settled. Companies that set prices to maximize profits want to set the selling price to sell the number of units that will generate the highest possible total profits (bottom line) Setting prices too low sell many units miss out on additional profits on each unit. Solution: sacrifice unit sales maximize profit. Setting prices too high large profit on each item sells fewer units. Firm loses money, and it may also be left with excess inventory. Calculating profits, managers weigh sales revenues against costs for materials and labour, as well as capital resources (plant and equipment) and marketing costs (such as maintaining a large sales staff).
