BUS 201 Lecture Notes - Lecture 9: Price Skimming, Dynamic Pricing, Psychological Pricing
29 Feb 2016
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Document Summary
Determining what the customer pays and the seller receives in. The goal that the seller hopes to achieve in the pricing products exchange for a product: pricing objectives for sale, revenue = selling price x units sold, profit-maximizing, market-share. May sacrifice unit sales to maximize profit. Companies set their prices to maximize profits. If prices too low, then miss out additional profits for each unit. If prices too high, then will make larger profit on each unit but less units sold. Pricing to gain the greatest possible market percentage. Market share (market penetration) long-run business must make a profit to survive companies set initial prices low to establish market share. A company"s percentage of the total industry sales for a specific product type. Price-setting tools: cost-oriented pricing considers the cost of the product and adds a markup to arrive at a final cost.
