MAR 3023 Chapter Notes - Chapter 10: Profit Maximization, Marginal Revenue, Pricing Strategies
Document Summary
Determining the costs provides a lower price limit. Analyzing the competition narrows the range of prices that can be charged: pricing. Units sold x price: profits bottom line (revenue minus total costs). Should describe what a firm hopes to achieve through pricing: should be specific, measurable, and reflect the market realities the firm face. Common pricing objectives includes: profit maximization, volume maximization, and survival: profit maximization involves setting a relatively high price for a period of time after their product launches. Aka penetration: survival involves lowering prices to the point at which revenue just covers cots, allowing the firm to survive a difficult time. One of the most important concepts in marketing and should be considered when pricing any product ix. Unit contribution margin the amount of revenue a product contributes per unit. Consumers are typically more price-sensitive the higher a product"s price is relative to expectations.
