BUS-2600 Chapter Notes - Chapter 10-11: Internal Communications, Marketing Mix, Pricing Strategies
4 Feb 2020
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Price has symbolic value for consumers: price as a signal. Inferences of value of product/service based on what is being charged: prices can be both too high and too low, price set too low may signal poor quality, price set too high might signal low value. Survive: marketing mix strategy, price needs to be consistent with other 3ps, company costs. Fixed costs--do not change as output changes/with production level: variable costs--vary with level of output. ["same thing can be either fixed or variable": determinants of price: external, competition, competitor"s prices. Shows the quantity of a product that customers will buy in a market at various prices if all other factors remain the same: y axis represents different prices, x axis shows quantity demanded. For most goods, there is a negative correlation between price and quantity demanded. Flat demand curve (price changes cause significant change in quantity demanded) Inelastic--price changes do not really affect quantity demanded: products typically have fewer substitutes.
