MGTA02H3 Lecture Notes - Pricing Strategies, Marketing Mix, Psychological Pricing
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MGTA02H3 Full Course Notes
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Pricing: managers deciding what the company will receive in exchange for its products. Companies price products to maximize profit and to meet pricing objectives=goals that producers hope to attain in pricing products for sale i. e. high market share, etc. Pricing to maximize profit is difficult take into consideration: cost of materials, labor, capital resources, costs of marketing, etc. Pricing for e-business objectives: lower prices due to ability to see competition very easily, less costs, web access to wholesalers, etc. Other pricing objectives: neither maximizing profit/market share is important i. e. during tough economic times or other events. Pricing as a planned activity that affects the market mix=pricing strategy. Cost oriented pricing considers the firms desire to make a profit and takes into the account the need to cover production costs. Bep= number of units that must be sold at a given price before the company covers all of its variable and fixed costs.
