MKTG1001 Lecture 13: W13 - Price & Place
Be able to explain the different types of pricing strategies.
•
Be able to describe the nature of marketing channels, and explain why marketing
intermediaries are used.
•
Be able to describe the different types of marketing intermediaries.
•
LO:
In the competitive marketplace, value-seeking customers have put increased pricing pressure
on many companies.
•
Yet, cutting prices is often not always the best solution. Reducing prices unnecessarily erodes
profits, contributes to damaging price wars and has the potential to erode brand value.
•
The challenge is to find the price that will let the company make a fair profit by getting paid for
the customer value it creates.
•
Price is the only element in the marketing mix that produces revenue; all other elements
represent costs. Price is also one of the most flexible and responsive marketing mix
elements.
•
Smart managers treat pricing as a key strategic tool for creating and capturing customer
value.
•
Price:
Provides profit level
•
Covers cost
•
Helps communicate positioning/strategy
•
When combined with other elements of the mix --> price influences consumer perceptions of
value
•
Price is associated with quality
•
The role of price in the marketing mix:
Price is the amount of money charged for a product or service, or the sum of the values that
customers exchange for the benefits of having or using the product or service.
•
Price is the only element of the marketing mix that produces revenue; all other elements
represent costs.
•
A company does not usually set a single price, but rather a pricing structure that covers
different items in its product line.
•
The company adjusts product prices to reflect changing costs and demand and to account for
variations in buyers and situations.
•
What is price:
W13 - Price & Place
Wednesday, 6 June 2018
2:01 PM
Lectures Page 1
Initiating price cuts
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Initiating price increases
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Buyer reactions to price changes
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Competitor reactions to price changes
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Initiating price changes:
Pricing strategies may aim at attracting new customers or to profitably retain existing ones
•
Low prices can prevent competition from entering the market or set prices at competitors
levels to stabiles the market
•
A product may be priced to help sales of other products in the company's line
•
Pricing goals:
Simple survival
•
Maximise profits (short term)
•
Grow market share
•
Pricing objectives:
Lectures Page 2
Grow market share
•
Block competition
•
Price/quality leadership (Image)
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Lectures Page 3
Document Summary
Be able to explain the different types of pricing strategies. Be able to describe the nature of marketing channels, and explain why marketing intermediaries are used. Be able to describe the different types of marketing intermediaries. In the competitive marketplace, value-seeking customers have put increased pricing pressure on many companies. Yet, cutting prices is often not always the best solution. Reducing prices unnecessarily erodes profits, contributes to damaging price wars and has the potential to erode brand value. The challenge is to find the price that will let the company make a fair profit by getting paid for the customer value it creates. Price is the only element in the marketing mix that produces revenue; all other elements represent costs. Price is also one of the most flexible and responsive marketing mix elements. Smart managers treat pricing as a key strategic tool for creating and capturing customer value. The role of price in the marketing mix:
