SMG MK 323 Chapter Notes - Chapter Ch. 14 & 15: Price Ceiling, Price Discrimination, Price Floor
16 Mar 2017
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Price is the overall sacrifice a consumer is willing to make to acquire a specific product or service. The five c"s of pricing: company"s objectives, profit orientation: focusing on target profit pricing, maximizing profits, or target return pricing, sales orientation. Set prices that believe will increase sales and help firm increase profits: competitor orientation. Competitive parity set prices at same price as competition. Status quo pricing, changes prices only to meet those of the competition: customer orientation. Consider prestige products or services, which consumers purchase for their status rather than their functionality. How consumers respond to actual changes in price. measures how changes in a price affect the quantity of the product demanded. It is the ratio of the percentage change in quantity demanded to the percentage change in price. % change in q demanded/ % change in price = price elasticity of demand price sensitive means elastic, and is less than -1.
