MOS 1021 Consumer Behaviour Chapter 9 Summary

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Department
Management and Organizational Studies
Course
Management and Organizational Studies 1021A/B
Professor
James O' Brian
Semester
Fall

Description
MOS 1021 Consumer Behaviour Chapter 9 Nearly Famous Enterprises Example Understand what prices market will bear how competitors will reactwhat target market is willing to payTight grasp on product costs to make accurate profit forecastsCompetitively price to cover costs profits retailer requirementsconsumer expectationsMany hidden costs to bringing products into Canada from the US exchange rate brokerage fees GST taxes fuel surcharge freighttransportation costsdutiesRetailers do not readily accept price increases midyearMajor uncontrollable variables volatile exchange rate uncertain world financial markets unpredictable gas pricesConsider what consumersretailers are likely to pay costs from supplierhidden costsWhat is a PriceTuition rent interest premium fee dues fare pricePrice moneyother considerations exchanged for ownership or use of a productBarter exchanging goodsservices for other goodsservicesAmount paid is usually different from list price quoted price o Discounts allowancesrebates lower price o Special feessurcharges raise priceBuyers are more willing to pay extra fees than a higher list pricePriceList PriceIncentivesAllowancesExtra FeesPrice as an Indicator of ValuePerceived benefits ie quality durabilityValue ration of perceived benefits to price o ValuePerceived BenefitsPriceFor a given price as perceived benefits increase value increasesThe higher the price the higher the qualityValue pricing increasing a products benefits while maintaining or decreasing pricePrice in the Marketing MixPrice has a direct effect on profitsProfitTotal Revenue Unit Price X Quantity SoldTotal CostPrice also affects quantity soldcost of production economies of scaleDemandOriented ApproachesEmphasize factors underlying customer tastespreferencesSkimming pricing setting highest initial price that customers desiring product are willing to pay o Customers are not price sensitive o As demand is satisfied price is lowered to attract more pricesensitive consumers
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