BSM 200 Lecture Notes - Lecture 4: Internet2, Direct Market, Status Quo
22 Feb 2017
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Profit goal: have a return they need to pay back or to maximize profit. Market share goal: price is lowered to increase sales volume, achieve rapid growth, or discourage competition. Status quo goal: companies do not want to compete on price and follows the leader"s price. Often occurs in oligopolies, such as the gas industry: meet the competition: price matching; will meet the price of the competitor but up to consumer to find lower price. Seasonal discounts: reductions or financial incentives offered to stock product in advance of season: manufacturer reduces inventory it has to stock prior to peak season demand. Cash discounts: reduction on invoice if buyer pays properly: allows seller to use money for other business expenses. Trade discounts and promotional allowances: price reductions for marketing functions that buyer undertakes for seller. Quantity discounts: reduced prices in relation to the quantity purchased. Price lining: marketers set different price points for different products to represent quality differences.
