MKT 337 Lecture Notes - Lecture 15: Fixed Cost, Value-Based Pricing
Document Summary
Seller: price = rev: consumer: price = cost of something, price allocates resources in a free-market economy, profit drives growth, salary increases, & corporate growth. Increased availability of bargain-priced private-label brands: price cutting as a strategy to maintain or regain market share, the "great recession" altered many people"s response to pricing. Not optimal, but more prevalent bc: costs are easy to estimate/measure, easy to justify to stakeholders. Value pricing: basing price of product of its value to customers. Key elements: value orientation: focus on econ value created by product for customer. Set of processes to capture portion of that value for firm. Price customization: buyer chars (age, gender, transactional chars (quantity bought, managing product line offering (coupons, dynamic pricing or yield management system, pricing approach where posted price is based on expected demand and typically useful for. % change in price: x = 1 or -1 = unitary, x>1 = elastic, x<1 = inelastic.
