24108 Lecture Notes - Lecture 6: S.M.A.R.T., Marketing Mix, Variable Cost
Document Summary
Analyse demand to develop an appropriate pricing strategy. How to manage prices as part of the marketing mix. Profit = (price x sales volume) total costs. Pricing benefits: buyer benefit satisfaction derived from the consumption or ownership of the product, seller benefit the revenue the sale derives, customers interpret price differently: Some believe that these reflect higher quality of product (price seeking) Others seek lower prices for greater value (price aversion) Pricing objectives: determining pricing objectives: pricing objective should be specific, measurable, What the customer is prepared to pay. Making products/activities appealing to a target market. Encouraging a change in attitude or behaviour among a target market. Elasticity of demand: price elasticity of demand is the sensitivity of quantity demanded to price changes: Ed= % q / % p: elastic demand % change in quantity greater than the % change in price (ed > 1) e. g:
