BUAD 307 Lecture Notes - Lecture 9: Premium Pricing, Rolex, Profit Margin

29 views2 pages

Document Summary

Only p (of the 4 ps) that creates value. Not just what you pay - everything that you exchange for the product you purchase. Time, effort to find the product, effort to research the product. Profit oriented: company policy: all products require at least an 18% profit margin. Sales oriented: set lower prices to increases sales in the short-term. Competitor oriented: firms that measure themselves against competitors, set prices similar to competitors. Customer oriented: set prices to add value to product/services. Premium pricing: luxury goods, fashion industry, apple products, rolex: customers. Price elasticity of demand: % change in price. If price elasticity is -2, a 1% decrease in price increases demand by 2% Income effect: higher income more inelastic. Substitution effect: the more substitutes there are for a product more elastic: costs. Total cost: sum of variable and fixed costs. # of units to sell to cover total costs, profit=0.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents