Pricing Concepts

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Pricing Concepts

• Chapter 20

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Price

• It is the _____ that is exchanged for products in
  a marketing transaction.
• It is a key element in the marketing mix because
  it relates directly to the generation of
  ________________.
• It is the ____________________ variable in the
  marketing mix.

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Because price has a psychological impact on
customers, marketers can us it ___________________
_. By pricing high, they can emphasize the
_____________ of a product and try to increase
the __________ associated with its ownership.
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The oldest form of exchange (trading of products)
is known as

• ________.

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• Price Competition emphasizing price and
  ______________________ competitors prices.
• Elements involved in price competition
• - Emphasis on _____________
• - Competitors price _____________
• - Price ______________________
• - ________________ price changes

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• i.e., __________ shampoos emphasize that other
  shampoos may cost more but dont work any better
  than ______________. (Competition on
  ________________)

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• __________ Competition sellers that emphasize
  distinctive product features to encourage
  __________ preferences among customers.
• Adv. A firm can build _____________

• A product under nonprice competition would most
  likely ________________ in the market if it is
  easy to ________.

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______________ Demand Curve
Price ________
P1
D1
Q1
Quantity demanded _____________
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__________ Product Demand Curve
Price rises
D1
P1
Q1
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_____________ Demand Curve
D1
__________________________________________________
__________
P1
Total revenue will _________
Q1
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_____________ Demand Curve
__________________________________________________
__________________
D1
P1
Total revenue will _________
Q1
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Factors Affecting Pricing Decisions
Other _____ __________ variables
__________ objectives
_________ objectives
_________
Pricing decisions
________ Regulatory issues
_________ __________ expectations
___________ Interpretation response
__________
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Organization Marketing Objectives

• Marketers should set prices that are consistent
  with the organizations __________________________
  __.

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Pricing Objectives

• 1. _______________ Adjust prices so that profits
  _________

2. ___________ Maximization It is rarely
operational because it achievement is difficult
to _________________________.
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• 3. Return of Investment pricing to attain a
  specified ________________________.
• - It is achieved by ___________________ because
  not all cost and revenue data are available when
  prices are set.
• 4. ___________________ used to maintain or
  increase a products sales in relation to total
  industry sales.
• - it can be used effectively whether total
  industry sales are ____________________

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• 5. Status __________ used when the organization
  is in a favorable position and desires
  ____________________.
• - it _______________________ price and can lead
  to a climate of _________ competition in an
  industry.
• 6. ___________________ set prices to recover
  cash as quickly as possible.

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Costs

• A company can not survive if it sells below cost
  (__________).

• _______________ technology

• ______________ on expenses

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Other Marketing Mix variables

• _________ a high price may result in low unit
  sales, which leads to _______ product costs per
  unit.
• Price is linked to ___________ (place).
• Price Promotion __________ prices often
  included in advertisement. _________________
  prices if you have to ask you cant afford it

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Channel Member Expectations

• ___________ Quantity Functional.

Customers Interpretation Response

• Internal reference price a price developed
  through ___________.

• _________________ reference price a comparison
  price provided by others

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• Generally, customers are most likely to rely on
  the price-_____________ association when they
  ___________ judge the quality of the product for
  themselves.
• The perception of price depends on a products
  __________________ and consumers
  ___________________ regarding price.

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• __________-conscious consumers are concerned
  about both the ________ and the ____________
  aspects of a product.
• __________-conscious consumers are striving to
  pay ____________ prices.
• _______________-sensitive consumers are drawn to
  products that signify prominence and
  ________________.
• i.e., people notice when you buy the most
  expensive brand of a product

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Competition

• _______________________
• _______________________
• _______________________
• _______________________

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Laws

• __________________-Patman Act it prohibits price
  discrimination that lessens competition among
  wholesalers and _______________.
• Robinson-Patman _____________ Acts limit the
  use of price _____________________________.

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Pricing for Organizational Markets

• 1. ________ (___________) Discounts discounts
  given to a purchaser for performing activities
  such as ________ _______________________________.

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Pricing for Organizational Markets

• 2. _________________ Discounts
• . _____________ Discounts Quantity discounts
  aggregated over a ________ period.
• i.e., the company will give a discount if the
  retailer purchases 300 shirts ____________________
  ________________________________________.

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• b. _________________________ Discounts
• i.e., the company will reduce the price of its
  shirts if the retailer purchases over 100.
• 3. ____________ Discounts i.e., price 50
• Term ___/____ net ____ or __/___, n/___
• - involves a cash discount (_____) if paid
  within _________ days (price 49)
• - full amount due by the _______ day (50)

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4. Allowances

• _________________________
• _________________________

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5. Geographic Pricing

• 1. F.O.B. (Free on Board) ___________ the price
  of the merchandise at the factory
  _________________________.
• i.e., price 425 25 (freight charge)
• 2. F.O.B. __________________ A price indicating
  that the producer is absorbing ___________________
  __________.
• i.e., price freight 425

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• 3. Uniform Geographic (______________) Pricing
• Charging _____ customers the _____ price,
  regardless of geographic location. i.e., everyone
  in the U.S. get the _______ price.
• 4. _______________ Pricing Pricing based on
  ________________ costs within major geographic
  _____________________.
• i.e., The fact that gas station in LA. Pays
  less for fuel than a gas station in CA.