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

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

Document Summary

Income effect: refers to the change in the quantity of a product demanded by consumers because of a change in their income. Substitution effect: refers to (cid:272)o(cid:374)su(cid:373)ers" a(cid:271)ility to su(cid:271)stitute other produ(cid:272)ts for the fo(cid:272)al (cid:271)ra(cid:374)d, thus increasing the price elasticity for the focal brand. It legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufactures. In the end the consumer"s decision always comes down to the value of the item vs the cost. 7: price lining, establishes a price floor and ceiling for an entire line of similar products that indicates the price levels for different amounts of quality, price bundling. Legal and ethical aspects of pricing: deceptive or illegal price advertising, deceptive reference points, pricing advertising should never deceive to the point of causing harm, but some puffery is allowed. If the reference point is true, it is usually legal.