MKTG 2030 Lecture Notes - Lecture 6: Price Drop, Fixed Cost, Unit Price
Document Summary
Price is a key marketing decision any business has to make. The price charged by a firm tells you whether or not you have succeeded in differentiating yourself from your competitors. Reason #2: price and your overall marketing strategy are inextricably related. Consumers are 50% more price-sensitive than they were 25 years ago. For example, footlocker cut nike orders by about million to protest the terms nike had placed on prices and selection. Nike cut its allocation of shoes to foot locker by million. Foot locker surrendered because consumers were frustrated because they could not find shoes they wanted and stopped shopping at foot locker. Reason #3: price has the most impact on your profits. Levers you can pull in your company to influence profits are price, costs (variable and fixed costs), and volume. A variable cost (raw material or labour) varies with production volume.
