MCS 1000 Chapter Notes - Chapter 10: Monopolistic Competition, Channel Tunnel

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 1000
• Professor: Douglas Adlam

Document Summary

Price: the amount of money charged for a product or service, or the sum of the values that buyers exchange for the benefits of having or using the product/service. Only element in marketing mix that produces revenue; all other elements represent costs. Smart marketers treat pricing as a key strategic tool for creating and capturing customer value. Customer perceptions of the products value set the ceiling for prices. Value-based pricing: setting price based on buyer"s perceptions of value rather than on the seller"s cost. Marketer cannot design a product & marketing program and then set the price. Price is considered before the marketing program is set. Company designs what it considers a good product, adds u the costs of making the product, & sets price that covers costs plus a target profit. Marketing must then convince buyers that product"s value justifies its price. Value based first assesses customer needs and value perceptions and than sets prices accordingly.