MGCR 352 Chapter Notes - Chapter 13: Irving Oil, Rolex, Cd Player
13 Feb 2013
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Many marketers often engage in the practice of value pricing increasing product or service benefits while maintaining or decreasing price. That is, the consumer will judge one product or service against other alternatives or substitutes. In doing so, a reference value emerges, which involves comparing the prices and benefits of substitute items. Steps: identifying pricing constraints and objectives constraint: Demand for the product class, product, and brand the number of potential buyers for the product class. Newness of the product: stage in the product life cycle the newer a product and the earlier it is in its life cycle, the higher the price that can usually be charged. Cost of producing and marketing the product . in the long run, a firm"s price must cover all the costs of producing and marketing a product. If the price does not cover the cost, the firm will fail, and so in the long term, a firm"s costs set a floor under its price.
