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Chapter 10

MAR3023 Chapter Notes - Chapter 10: Profit Margin, Bitcoin, Business Cycle


Department
Marketing
Course Code
MAR3023
Professor
Andrew Thoeni
Chapter
10

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Principles of Marketing Chapter 10 Price
. Yes, ut What Does It Cost?
o What is Price?
Price the assignment of value, or the amount the consumer must exchange to receive the
offering
Bitcoin most popular and fastest growing digital currency
Not controlled by one single entity, beyond grasp of governmental control
No middle man
o Profit Objectives
When pricing strategies are determined by profit objectives the focus is on a target level of
profit objectives, the focus is on a target level of profit growth or desired net profit margin
Firms that believe profits is what motivates shareholders and bankers
Set prices to allow for an 8 percent profit on all goods sold
o Competitive Effect
Alter pricing strategy during first quarters of the year to increase sales duig opetito’s
introduction of a new product
o Customer Satisfaction
Alter price levels to match customer expectations
o Image Enhancement
Alte piig poliies to eflet the ieased ephasis o the podut’s ualit iage
Prestige products products that have high price and that appeal to status-conscious
consumers
o Sales or Market Share
Develop bundle pricing offers in order to increase market share
Market share percentage of a market accounted for by a specific firm, product lines, or brands
10.2 Costs, Demand, Revenue, and the Pricing Environment
o Step 2: Estimate Demand
Demand ustoes’ desie fo a podut
o Demand Curve
Normal Products
Demand increases as price decreases
Prestige Products
Demand increases as price decreases, demand decreases as price decrease
o Shifts in Demand
Upward shift Right of curve 1.
o Estimate Demand
Marketers must understand and accurately estimate demand
Identify number of buyers or potential buyers for their product then multiplying that estimate
times the average amount of each member of the target market
Net pedit what the opa’s aket shae is likel to e
o Price elasticity of demand
A measure of sensitivity of customers to changes in price
o Step 3: Determine costs
Variable and Fixed Costs
Variable the cost of production that are tied to and vary, depending on the number of
units produced
Fixed costs costs of production do not change with the number of units produced
Average fixed cost -fixed costs per unit produce
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