COMM 2401 Chapter Notes - Chapter 10: Marketing Mix, Target Costing, Marketing Strategy
29 Oct 2018
School
Department
Course
Professor
Document Summary
Chapter 10: pricing: understanding and capturing customer value. Price: the amount of money charger for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service. Historically, price has been the major factor affecting buyer choice. Prices generate revenue and directly affect the bottom line. Customer perceptions of the product"s value set the ceiling for prices. Assigning value is difficult because values are subjective. Adding amenities and charging more rather than cutting services to maintain low price. Cost-based pricing: setting prices based on the costs for producing, distribution, and selling the product plus a fair rate of retire for effort and risk. Cost-based pricing is product-driven could lead to disappointing profits: design a good product, determine product costs, set price based on cost, convince buyers of product"s value. Fixed costs: overhead: costs that do not vary with production or sales level.
