Management and Organizational Studies 1021A/B Chapter Notes - Chapter 28: Cherry Picking, Marketing Mix

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1021A/B
• Professor: Bob Larose

Document Summary

Mar 30 | mos1021b | the marketing mix (product, price, place, promotion) Markup= difference between selling price and cost, usually expressed as a % of cost. High-volume products usually have smaller markups than do low-volume products. Markups may appear very large but in fact only result in very low profit. Cost-plus pricing= summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price. Most commonly used method to set prices for business products. Increasingly favored among b2b marketers in the service sector. Target profit pricing= set an annual target of a specific dollar amount of profit. Depends on an accurate estimate of demand difficult to estimate, can cause disaster if estimated too high. Best for firms offering new or unique products, w/o a lot of competition. Target return-on-sales pricing= set prices that will give a profit that is a specified percentage.