BU352 Chapter Notes - Chapter 11: Marketing, Pricing Strategies, Liquid Oxygen
Document Summary
Price: overall sacrifice consumer is willing to make to acquire a specific product or service. Key is to match product or service with consumer"s value perceptions. Successful pricing strategies are built through the five c"s (critical components) Income effect: changes in quantity demanded based on income: substitution effect: # of close substitutes, costs, need to understand cost structure do determine degree to which their product or service can be profitable. Sell goods at prices lower than intended by manufacturer: firms usually have to agree to sell at certain prices. Cost-based: start with costs, don"t recognize role consumers or competitors play. Competitor based: set prices to reflect how want to be seen compared to competition. Value based: focuses on overall value of product offering as perceived by consumer. Improvement value: how much more or less consumers are willing to pay for product relative to comparative products ( more for 3d at theatre)
