Principles of marketing: Lecture 24

Principles of marketing: Lecture 24 provide students with knowledge about: dynamic pricing; factors affecting price decisions; marketing objectives that affect pricing decisions; marketing mix variables that affect pricing decisions;... Please refer to this lesson for details!

MGT301 Principles of Marketing Lecture­24 Summary of   Lecture­23 Product Today’s Topics What is Price? Price Has Many Names  Rent  Tuition  Bribe  Fee  Fare  Salary  Rate  Toll  Wage  Commission  Premium  Interest  Tax Price Definition – The amount of money charged for a product or service, or  the sum of the values that consumers exchange for the  benefits of having or using the product or service   Price is the sum of all the values that consumers exchange for  the benefits of having or using the product or service Price is the only element in the marketing mix that produces  revenues; all others represent costs Dynamic Pricing Charging different prices depending on individual customers  and situations Factors Affecting Price Decisions            Consumer Perception of Price and Value  Pricing decision must be buyer/ consumer oriented Price­Demand Relationships The Demand Determinant of Price Price D D Quantity Demand Curves Price Elasticity of Demand Price How quantity demanded responds to price changes A Inelastic Demand Demand Hardly Changes With a Small Change in Price P2 P1 Price Q Q1 Quantity Demanded per Period P’2 B Elastic Demand Demand Changes Greatly With a Small Change in Price P’1 Q2 Q1 Quantity Demanded per Period  Elastic demand – price changes affect demand – total revenue falls when price increases – total revenue increases when price falls  Inelastic demand – price changes do not affect demand – total revenue increases when price increases – total revenue falls when price falls  Consider competitors’ costs, prices, and possible reactions  when developing a pricing strategy   Pricing strategy influences the nature of competition – Low­price low­margin strategies inhibit competition – High­price high­margin strategies attract competition  Benchmarking costs against the competition is recommended Other environmental elements  Economic conditions – Affect production costs  – Affect buyer perceptions of price and value  Reseller reactions to prices must be considered  Government may restrict or limit pricing options  Social considerations may be taken into account Enough for today. .  Summary What is Price? Price Has Many Names  Rent  Tuition  Bribe  Fee  Fare  Salary  Rate  Toll  Wage  Commission  Premium  Interest  Tax Price – The amount of money charged for a product or service, or  the sum of the values that consumers exchange for the  benefits of having or using the product or service Factors Affecting Price Decisions            Internal Internal Factors Factors Positioning Objectives Pricing Pricing Decisions Decisions External External Factors Factors Target Market Next… Pricing (cont ) MGT301 Principles of Marketing Lecture­24 ... vary directly with production volume Types of Cost Factors that Affect Pricing Decisions Total TotalCosts Costs Sum Sumof ofthe theFixed Fixedand andVariable VariableCosts Costsfor foraaGiven Given Level Levelof ofProduction... The amount? ?of? ?money charged for a product or service, or  the sum? ?of? ?the values that consumers exchange for the  benefits? ?of? ?having or using the product or service   Price is the sum? ?of? ?all the values that consumers exchange for ... ManyBuyers Buyersand andSellers SellersTrading Trading Over a Range of Prices Over a Range of Prices Different Different Types Typesof of Markets Markets Oligopolistic OligopolisticCompetition Competition