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Money or other Considerations exchanged for the ownership or use of a good or service
Final Price=List price - (Incentives+Allowances)+ Extra fees |
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the ratio of perceived benefits to price
Value=Perceived Benefits/Price |
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| Profit= total revenue- cost |
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| Highest initial price that customers really desiring a new product will pay. Then lowers price to increase demand. |
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| Setting a low initial price on a new product to appeal immediately to a mass market |
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| using price as a measure of quality. Setting a high price to attract customers to the belief that the product is quality |
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| Pricing something at 4.99 instead of 5 dollars |
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| What price the wholesaler will pay for the product after determining the markup prices |
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| EX: airline prices drop when needing to fill seats |
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| Adding a fixed percentage to all products in the store |
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| Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price |
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| when a firm sets an annual target of a specific dollar volume of profit |
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| Firms that desire a certain percentage of profit |
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Traditional Pricing through channels
Ex: candy bars at a vending machine will all be 75 cents |
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| Above-at-below market pricing |
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Above=rolex
At=Revlon
Below=General Cereal (not lucky charms) |
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| Products on Sale to attract customers to the store |
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| Graph relating quantity sold and price which shows how many units will be sold at a given price |
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| Price Elasticity of Demand |
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| the percentage change in the quantity demanded relative to a percentage change in price. |
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| a slight decrease in price results in a relatively large increase in demand |
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| Slight change in price will not significantly affect the demand |
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| Sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold |
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| sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold |
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Estimates the relationship between total revenue and total cost to determine profitability at different levels of output
Fixed Cost/(Unit price - Unit Variable Price) |
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| Expectations that specify the role of price in an organizations marketing and strategic plans |
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- Profit
- Sales
- Market Share
- Unit Volume
- Survival
- Social Responsibility
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| Types of Pricing Objectives |
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