BU352 Lecture Notes - Lecture 7: Demand Curve, Marketing Mix, Kijiji
Document Summary
What is a price: the overall sacrifice a consumer is willing to make money, time, energy to acquire a specific product or service, costs vs. benefits, ex. Waiting in line overnight to get the new apple iphone. The importance of pricing: a strategic opportunity to create value, not an after thought to the rest of the marketing mix, pricing signals quality or lack of quality. Price as a signal: prices can be both too high and too low, prices set too low may signal poor quality, price set too high may signal low value. 1 company objectives: profit orientation, maximize profits, target return pricing, target profit pricing. 2 customers: demand curve, price vs. 3 costs: variable costs, vary with production volume, ex. Labour, materials, packaging shipping: fixed costs, unaffected by production volume, ex. Rent, utilities, insurance, property tax: total cost, sum of variable and fixed costs.
