MKTG 301 Lecture Notes - Lecture 3: Price Skimming

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23 Jul 2018
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Variablility: quality of services depend on who provides them, when/where/how. Inseperability: services cannot be separated from their providers. Perisability: services cannot be stored for later use. Three major pricing strategies: customer value-based pricing. Price is made before marketing is set: cost-based pricing. Based on the costs to produce the product: competition-based pricing. Price elasticity of demand: measure of the sensitivity of demand to changes in price. Market-skimming pricing (price skimming): setting a high price to skim maximum revenues from the segments willing to pay the high price. Market-penetration pricing: setting a low price to attract a large number of buyers and a large market share. Discount: a straight reduction in price on purchases during a stated period of time or of larger quantities allowance: promotional money paid to retailers for an agreement to feature the manufacturer"s products in some way.

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