COMM 296 Lecture Notes - Lecture 2: Price Skimming, Marketing Mix
Document Summary
Lo 14-6 describe the difference between an everyday low price strategy (edlp) and a high/low strategy. Those who are not price sensitive and willing to pay high price. More price-sensitive customers who wait for the low sale price: communicate strategy through creative use of reference price = price against which buyers compare actual selling price of a product that facilitates evaluation process. Seller labels reference price as the actual selling price (ex: Lo 14-7 explain the difference between a price skimming and a market penetration pricing strategy. Low price does not signal high quality but decrease risk for consumers to purchase the product and test the quality themselves. Employ skimming to quickly earn back high r&d investment; test consumers" price sensitivity. Competitors cannot be able to enter easily; price competition will lower price and undermine strategy; patents might protect competitors from entering the market.
