MKC1200 Chapter Notes - Chapter 12: Marketing Mix, Profit Margin
26 Nov 2013
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Document Summary
Price it is the sum of values paid in exchange for having or using a product or a service. In simple terms, it is the money charged for a product. Internal factors affecting pricing decisions: marketing objectives, survival, current profit maximisation, market share leadership, product quality leadership, other internal factors, marketing mix strategy, costs, organisational considerations. External factors affecting pricing decisions: the market and demand, number of competitors, other external factors. Major pricing strategies: cost-based pricing it refers to pricing that according to the costs of producing the product. It ensures that the customers don"t end up paying too much: cost-plus pricing it involves adding a substantial amount of mark ups over and above the cost of the product. Target profit pricing is setting a target profit to be reached and setting the price of the product accordingly: value-based pricing it refers to pricing of the product based on perceived benefits received from the product.
