BU354 Lecture Notes - Lecture 10: Geographical Pricing, Pricing Strategies, Monopolistic Competition
Document Summary
Chapter 11: pricing concepts and strategies: establishing value. Everything the consumer gives up to attain the product. Informational: it signals quality: high price = high perceived quality. This is the only element that creates revenue for the company. O(cid:374)e of the (cid:373)ost i(cid:373)porta(cid:374)t fa(cid:272)tors i(cid:374) a (cid:271)uyer"s de(cid:272)isio(cid:374) Company objectives pricing: profit, sales (number of sales or dollar sales), competitor (competitive parity), and customer (value-based) pricing strategies. Consider some of these, not just one. Customers how they react to the pricing strategies. Costs variable (change with production) + fixed costs = total costs: companies start at a negative value fixed costs are uncovered by sales, break-even point = revenues = costs. Pricing is set by demand and supplier situation) Channel members the relationships with other businesses (supply chain members). Demand curve - shows how much consumer demand changes with price fluctuations. Price elasticity - ho(cid:449) respo(cid:374)si(cid:448)e a produ(cid:272)t"s de(cid:373)a(cid:374)d is to(cid:449)ard the (cid:272)ha(cid:374)ges i(cid:374) pri(cid:272)es.
