MARK 201 Chapter Notes - Chapter 10: Price Floor, Opportunity Cost, Inverse Relation
Document Summary
Total value that customers exchange for the benefits of having or using the product or service. Based on the value the consumer perceives they will get from it. Set target market to match perceived value. Design product to deliver value at target. More quality for less than customers expect to pay. Goods are priced according to the value they offer the customer. Instead of cutting prices to match competition, you attach value added features. Setting a price to break even on all costs. Needs to determine where it will break even. Uses a different target as opposed to breaking even. Total costs (fixed and variable) set minimum price charged. If (cid:272)o(cid:374)su(cid:373)e(cid:396)s pe(cid:396)(cid:272)ei(cid:448)e less (cid:448)alue (cid:272)ha(cid:396)ge less o(cid:396) t(cid:396)(cid:455) a(cid:374)d (cid:272)ha(cid:374)ge thei(cid:396) perceptions. Lots of s(cid:373)alle(cid:396) (cid:272)o(cid:373)petito(cid:396)s (cid:272)ha(cid:396)ge less to d(cid:396)i(cid:448)e out competition. La(cid:396)ge, lo(cid:449) p(cid:396)i(cid:272)ed (cid:272)o(cid:373)petitio(cid:374) ta(cid:396)get a (cid:374)i(cid:272)he (cid:449)ith (cid:448)alue added p(cid:396)odu(cid:272)ts. Co(cid:373)petito(cid:396)s" offe(cid:396)i(cid:374)g, (cid:373)a(cid:396)ket positio(cid:374) a(cid:374)d st(cid:396)e(cid:374)gths a(cid:374)d (cid:449)eak(cid:374)esses.
