COMMERCE 2MA3 Chapter 11: Commerce 2MA3: Chapter 11 Summary
6 Nov 2016
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Chapter 11: pricing concepts & strategies establishing value. Price is the overall sacrifice a consumer is willing to make to acquire a specific product. Includes the money that must be paid to acquire a product and the non-monetary sacrifices like time required to acquire the product. Key to successful pricing is to match the product with consumer value perceptions. Price set too low may signal low quality, poor performance and other negative attributes. Price is the only part of the marketing mix that generates revenue. Consumers rank price as one of the most important factors in the purchase decision. Price is the most challenging of the mix. Consumers use the price of a product to judge quality. Factors influencing price elasticity of demand: i- ii- Substitution effect: refers to consumers" ability to substitute other products for the focal brand, thus increasing the price elasticity of demand for the focal brand.
