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MGTA02H3 (363)
Chapter 7

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Department
Management (MGT)
Course
MGTA02H3
Professor
Chris Bovaird
Semester
Winter

Description
Chapter 7The 4 Ps PriceIt is an important element of the marketing mix because it influences both consumer demand for a product and company profitability Consumers want products that satisfy their needs and they want them to be available in the right places but they also look for the lowest pricesFive key pointsCannot set the price without understanding your costMarkup You need to be able to define explan markup and calculate the markupStrategie skimming and presentation explainUnderstanding your cost Variables VS Fixed CostsBreak even analysis Price cost and quantityPricing Objectives and ToolsIn pricing managers decide what the company will receive in exchange for the products Company often price products to maximize profits but they also hope to attain other pricing objectives when selling their products Pricing decisions are also influenced by the need to survive in the marketplace by the social and ethical concerns and even by corporate imagePricing to Meet Business ObjectivesPrice No magic formula for determining price It begins with costs You must cover cost of good sold The costs of making the products The only way to set prices is to understand the costMarkup What the business adds to cost of good sold to arrive its price is called markup No restriction nor formula to determine the priceProfit maximizing objectivesPricing decide what the company will receive in exchange for its productsBear in mind that customer will not buy your product unless they think the price is right unless they think is a fair exchangeSetting the price too low miss the opportunity to make additional profit loser money on each exchangeSetting the price too highSell fewer unitsExcess inventoryReduce Production operationsWhen calculating the profits managers weigh receipts against costs of production and capital resources which the company must tie u to generate that level of profitPricing for Ebusiness Objectives Internet provides a more direct link between producer and ultimate consumers avoid the costs of entailed by the wholesalers and retailers Another factor in lower internet prices is the ease of comparison shoppingMarket Share ObjectivesMarket Share A companys percentage of the total market sales for a specific product
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