Marketing CH 11 Notes. .docx

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Western University
Management and Organizational Studies
Management and Organizational Studies 2320A/B

Price Amount of money charged for a productservice or the sum of the VALUES that customers exchange for the benefits of having o using the product or serviceHistorically Price is a major factor now still Firms Market Share and profitability4Ps Price Product Promotion Placement PRICE only one that is INFLOW OF REVENUEMost Flexible out of the 4 PCreating and Capturing ValueProduct cost floor of the price Customers perception of product valueceilingValueBased PricingUnderstanding customer value of a productservicebefore the marketing programme is set Cost based pricingproduct drivenCompanieshard to measure the value customers will attach to a product Service different consumers and different situations1Good Value Pricing Right combination of Quality Service at a FAIR PRICEaLess expensive version of established brand name ArmaniArmani exchangebRetail LevelECLP Every Day Low Pricing Constant low price with few temporary discount WalmartcHighlow pricing Higher pricing but FREQUENT promotions VS 2 Value Added Pricing ValueAdded features and services to differentiate a companys offer and charging higher prices aBuild pricing power no price competition and justify higher pricesbBuild value in its market offering cCustomers not motivated by Price what they get for what they paid dSmart marketers price their products accordingly Company and Product CostFloor PriceCostbased pricingsetting prices based on cost for a producingb distributing c sellingthe product plus a fair rate of return for effort and risk Fixed Cost overhead Variable Cost Total costfixedvariable cost Priceminimum total costCost vs levels of production
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