COMM 223 Chapter Notes - Chapter 11: Price Floor, Value-Based Pricing, Demand Curve
19 Feb 2015
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It is the only marketing mix element that produces revenue directly. Price is a major component of perceived consumer value. Price can be changed relatively quickly: flexible element of the marketing mix. Historically, most pricing was dynamic (determined by an interaction of buyer and seller in real time). Fixed pricing is more recent (say, 1940"s and on). We are witnessing the resurgence of dynamic pricing especially on the web (e- bay: bidding for items in real time. Customer perception value!price ceiling ( no demand above this price) Price floor ( no profits below this price) Two fundamentally different methods of price determination are represented by the two ends of the above conceptualization: (1) cost based pricing, (2) pricing based on consumer. Average cost is the cost associated with a given level of output. 1-good value pricing: offer just the right combinations of quality and good service at a fair price (less-expensive versions, redesign)
