MGMA01H3 Chapter Notes - Chapter 14: Marketing Mix
Document Summary
Introduction: many pricing issues that the manager must understand, include the setting of pricing policies, strategic decisions as to the level at which price should be set, and the numerous day-to-day issues in pricing management. A pricing decision flow chart: a marketing approach to pricing begins and ends with the company"s marketing strategy, it sets the general parameters for pricing decisions and becomes the reference point against which pricing effectiveness is measured. Establish pricing objectives: objectives can relate to profits, volume, competition, or prestige, once pricing objectives have been established, economic and cost, and consumer analysis takes place. the firm cannot price below its variable cost of product without losing money on each sale: long run. there has to be some contribution to overhead. Establish an initial price: competitive analysis and legal and ethical analysis will almost always result in a price that is somewhere between the floor and the ceiling.