MGMA01H3 Study Guide - Midterm Guide: Fixed Cost, Marketing Mix, Psychological Pricing
Document Summary
Price: amount of money charged for a product or service; sum of all values that customers exchange for the benefits of having or using the product or service. Only element in marketing mix that produces revenue. Price falls between too high to produce demand and too low to produce profit. Customer perception of product value sets limit. Must consider internal and external factors when setting price between the two. Competitors" strategies and prices, marketing strategy and mix and nature of market and. If price is perceived greater than value then will not buy. If price is below costs than net loss demand. Three major pricing strategies: customer value, cost and competition based pricing. Customer value-based pricing: setting price based on buyers" perceptions of value rather than on the seller"s cost. Price and other mix variables considered before marketing program. Perceived value differs based on consumer and situation.
