BUS 343 Chapter Notes - Chapter 10: Bath & Body Works, Predatory Pricing, Dominate
Document Summary
Reducing prices unnecessarily can lead to lost profits and damaging price wars. Better to persuade customers that paying a higher price for the company"s brand is. It can cheapen a brand justified by the greater value they gain. Price - the amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product/service. It"s the only element in the marketing mix that produces revenue; other elements represent costs. Also it can be changed quickly; is more flexible. Customer perceptions of the product"s value sets the ceiling for prices (how high it can go) Product costs set the floor prices (the minimum you must charge to not make a loss) 3 major pricing strategies: customer value-based pricing, cost-based pricing, competition- based pricing. Customer value-based pricing - setting price based on buyers" perceptions of value rather than on the seller"s cost.