Management and Organizational Studies 2320A/B Chapter Notes - Chapter 11: Demand Curve, Market Power, Marketing Strategy

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2320A/B
• Professor: Kevin Thompson

Document Summary

Exchange something of value (the price) to get something of value in return (the benefits of having or using the product) Value-based pricing: uses buyers" perceptions of value, not the seller"s cost, as the key to pricing. Marketer cannot design a product and marketing program and then set the price. Price is considered along with the other marketing mix variables before the marketing program is set. Company first assesses the customer needs and value perceptions. Price is set to match consumers" perceived value. Companies often find it hard to measure the value. Good value is not the same as low price customers will attach to a product. If the price turns out to be too high, the company must settle for lower markups or lower sales, both resulting in disappointing profits. Offering just the right combination of quality and good service at a fair price.