• price does not always take the form of money
• the oldest form of trade is barter

- price can be changed quickly in response to changing demand, FLEXIBLE

- price is related to total revenue and profit

- price can determine quantity sold

- price has a psychological dimension

Emphasizing price as an issue and matching or beating competitors' prices

• to compete effectively, firm must be the low cost seller, relies on standardized products, frequent price changes, provides flexbility

Emphasizing factors other than price to distinguish a product from competing brands

- features, quality, promotion, packaging

A graph of the quantity of a product taken by buyers in the market at various prices, given that all other factors are held constant

-other factors may affect the demand curve and cause it to shift (promotion, quality, etc)

- prices are set consistent with the organization's mission and goals

(ex. market share, lower prices, raise cash quickly, temporary price reductions)

- channel member expects to receive PROFIT, compensated with discounts for large orders and prompt payments, provide support activities such as training, service, and promotions

(factors effecting pricing decisions)

Internal reference price

pricing the basic product in a product line low while pricing related items at a higher level

ex. gillette razor, actual razor blades are expensive