Pricing Concepts for Establishing Value
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| show | Competition, Costs, Company Objectives, Customers, Channel Members.
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| Price | show 🗑
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| Company Objectives and Pricing Strategy Implications | show 🗑
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| Profit-Oriented | show 🗑
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| Sales-Oriented | show 🗑
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| Competitor-Oriented | show 🗑
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| show | Target a market segment of consumers who highly value a particular product benefit and set prices relatively high (referred to as premium pricing)
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| show | Specifically by focusing on target profit pricing, maximizing profits, or target return pricing.
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| Target Profit Pricing | show 🗑
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| show | A profit strategy that relies primarily on economic theory. If a firm can accurately specify a mathematical model that captures all the factors req to explain & predict sales & profits, it should be able to identify the price at which its profits maxed.
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| show | A competitor-based pricing method by which the firm deliberately prices set for competing products to capture those consumers who always shop for the best or for whom price doesn't matter.
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| Competitor Orientation | show 🗑
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| Competitive Parity | show 🗑
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| show | A competitor-oriented strategy in which a firm changes prices only to meet those of competition.
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| show | A company objective based on the premise that the firm should measure itself primarily according to whether it meets its customers' needs.
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| Demand Curve | show 🗑
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| show | Those that customers purchase for status rather than functionality.
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| Price Elasticity of Demand | show 🗑
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| Elastic | show 🗑
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| show | Refers to a market for a product or service that is price insensitive; that is, relatively small changes in price will not generate large changes in the quantity demanded.
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| show | Refers to the change in the quantity of a product demanded by consumers due to a change in their income.
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| show | Refers to consumers' ability to substitute other products for the focal brand, thus increasing the price elasticity of demand for the focal brand.
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| show | The percentage change in demand for product A that occurs in response to a percentage change in the price of product B; see complimentary products.
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| Complimentary Products | show 🗑
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| show | Products for which changes in demand are negatively related; that is, a percentage increase in the quantity demanded for product A results in a % decrease in the quantity demanded for product B.
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| show | Those costs, primarily labor and materials, that vary with production volume.
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| show | Those costs that remain essentially at the same level, regardless of any changes in the volume of production.
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| show | The sum of variable and fixed costs.
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| Break-Even Analysis | show 🗑
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| show | The point at which the number of units sold generates just enough revenue to equal the total costs; at this point, profits are zero.
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| Contribution Per Unit | show 🗑
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| show | One firm provides the product or service in a particular industry.
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| show | Occurs when only a few firms dominate the market.
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| show | Occurs when two or more firms compete primarily by lowering their prices.
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| Predatory Pricing | show 🗑
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| Monopolistic Competition | show 🗑
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| show | Occurs when different companies sell commodity products that consumers perceive as substitutable; price usually is set according to the laws of supply and demand.
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| show | Employs irregular but not necessary illegal methods; generally, it legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer.
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