MGMA01H3 Chapter Notes - Chapter 11: Pricing Strategies, Demand Curve, Monopolistic Competition
Document Summary
Price amount of money charged for a product or service; the sum of all values that customers exchange or the benefits of having or using the product or service. Only element in marketing mix that produces revenue: all other elements represent costs. When setting prices, company must consider several internal and external factors, including competitors" strategies and prices, overall marketing strategy and mix, and nature of market and demand. Three 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. Price is considered along with other marketing mix variable before marketing program is set. Process: assess customer needs and value perceptions, set target price to match customer perceived value, determine costs that can be incurred, design product to deliver desired value at target price. Two types of value-based pricing: good-value pricing and value-added pricing.
