MKTG 2030 Chapter 6: Chapter 6 – Pricing Strategies
Document Summary
Price is a key marketing decision any business has to make. Its priced at a premium but customers are willing to pay the high prices. Consumer pricing process: problem recognition, information search, alternative evaluation --> men shop by elimination, purchase, post purchase evaluation. Reason 2: they blindly chase after market share. Reason 3: they rely too much on costs to make pricing decisions: cost-plus pricing - a pricing method where-by a profit margin is added to the cost of an item to arrive at its final price. Pocket price: price determined by the manufacturer is not always the price you pay at retail to put it in your pocket, discounts, sales features, sales person concessions, varying retail margins all affect pocket price. Two approaches you can take to making pricing decisions. Internal focus: costs before customers, follow a narrow product focus (orientation) - a narrow minded and myopic organizational philosophy that guides decision making.
