COM 250 Chapter Notes - Chapter 10: Market Power, Price Ceiling, Psychological Pricing
22 Nov 2016
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Document Summary
The only element in the marketing mix that produces revenue. One of the most exible marketing mix elements. Play a key role in creating customer value & building relationships: customer value-based pricing: setting price based on buyers" needs & their perceptions of the product"s value rather than on the seller"s costs. Customer"s perception of value sets the price ceiling, in which the price cannot be set above. Price to considered along with the other marketing mix variables. These product costs sets the price oor, in which the price cannot be below. Cost-plus pricing (mark-up pricing): adding a standard mark-up to the cost of the production: break-even pricing (target return pricing): setting a price to break even on the costs of making & marketing a product. The higher the price, the lower the break-even point will be break-even volume = ( xed costs) (price - variable costs/unit)
