BUSI 2202U Chapter Notes - Chapter 13: Yield Management, Dodge Viper, Target Costing
Document Summary
Price is the money or other considerations (including other goods and services) exchanged for the ownership or use of a good or service. This practice of exchanging goods and services for other goods and services rather than for money is called barter. The factors that increase or decrease the final price of an offering help consumers construct a price equation . Value is defined as the ratio of perceived benefits to price. For many consumers, a low price might imply possible poor quality, and ultimately, poor perceived value. The consumer will judge one product or service against other alternatives or substitutes. A reference value emerges, which involves comparing the prices and benefits of substitute items. The importance of price in the marketing mix necessitates an understanding of six major steps involved in the process organizations go through in setting prices. Pricing constraints are factors that limit the latitude of prices a firm may set.
