Textbook Notes (367,844)
Canada (161,454)
MGMA01H3 (184)
Angela Xu (6)
Chapter 11

Chapter 11 Marketing.docx

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Department
Management (MGM)
Course
MGMA01H3
Professor
Angela Xu
Semester
Fall

Description
Chapter 11Pricing Strategy Learning Objectives 1 Answer the question What is a price and discuss the importance of pricing in todays fastchanging environment 2 Identify and define the important factors affecting pricing decisions including the impact of customer perceptions of value the company and product costs and other internal and external factors 3 Describe the major strategies for pricing new products 4 Explain how companies find a set of prices that maximizes the profits from the total product mix 5 Discuss how companies adjust their prices to take into account different types of customers and situations 6 Discuss the key issues related to initiating and responding to price changes What is a pricePricethe 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 or servicePrice is the only element in the marketing mix that produces revenue all other elements represent costsFrequent problem is that companies are too quick to reduce prices to get a sale rather than convincing buyers that their products greater value is worth a higher price Pricing is sometimes too cost oriented rather than customervalue oriented Factors to consider when setting prices Customer perceptions of the products value set the ceiling for prices while product costs set the price floor for products Customer Perceptions of ValuePricing decisions like other marketing mix decisions must start with customer value Effective customeroriented pricing involves understanding how much value consumers place on the benefits they receive from the product and setting a price that captures this value ValueBased PricingSetting price based on buyers perceptions of value rather than on the sellers cost
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