COMM 299 Lecture 7: LESSON 7
11 Feb 2017
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Price: the amount of money charged for a product or service. Pricing decision is interrelated with all of the other elements. Co(cid:374)su(cid:373)ers (cid:271)uy the (cid:858)(cid:448)alue propositio(cid:374)(cid:859) (cid:449)hi(cid:272)h is a fu(cid:374)(cid:272)tio(cid:374) of the pri(cid:272)e a(cid:374)d the su(cid:373) of the attributes/benefits. Pricing ensures your survival and shapes customer perceptions of your product. Market penetration: setting a lower price to gain large market share: market must be highly price sensitive, production and distribution costs must decrease as sales volume increases, low price must help keep out competition. Pricing concepts: reference pricing: the price that a customer uses to compare and judge other prices, ceiling pricing: the maximum a customer is willing to pay, floor pricing: the minimum price a customer is willing to pay. As long as the value of the product outweighs the risk customers will buy. Negotiation: an interpersonal decision-making process wherein two or more people agree on how to allocate scare resources: be clear on what you want.
