MKT 100 Lecture Notes - Lecture 11: Profit Margin, Price Skimming

• School: Ryerson University
• Department: Marketing
• Course: MKT 100
• Professor: Spergel Marla

Document Summary

Tiffany keeps its prices high even during a recession to protect its imge. Profit oriented- example all products must provide for at least an 18% profit margin to reach set goal. Sales oriented set prices very low to generate new sales thus taking away sales from competitors. Competitor oriented- set prices very low to discourage more competitors from entering the market. Customer oriented- target a segment of the market of consumers who highly value a particular product benefit and set prices relatively. It"s all about understanding consumer"s reactions to different prices. Price is half of the value equation. Price elasticity the market for a product or service is price sensitive (elastic) steak price insensitive (inelastic) milk. Monopolistic: many firms competing for customers, e. g. toys. Pure: most frequently purchased consumer goods such as soft drinks. All costs calculated on a per unit basis. Assumes costs don"t vary for different levels of production.