MKTG101 Lecture Notes - Lecture 8: Publilius Syrus, European Cooperation In Science And Technology, Contribution Margin
15 Mar 2020
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Document Summary
Everything is worth what its purchaser will pay for it. (publilius syrus) A cynic knows the price of everything but the value of nothing. (oscar wilde) If you have to ask the price, you can"t afford it. (rolls royce) Management of price is called pricing and is based on overall organisational objectives. Price is a measure of value to both buyers and sellers. Buyers see price as a measure of benefit, sellers need prices to cover costs and provide profits. Price is directly related to profitability: profit = (price x sales volume) - total costs. Price is a major determinant of sales volume. In turn, sales volume influences costs, both per unit sold, and the production cost of each unit. Buyers benefit; satisfaction derived from the consumption or ownership of the product. Some are motivated by higher prices, believing that these reflect higher quality of product (price seeking) Others seek lower prices for greater value (price aversion)
