BUS 343 Chapter Notes - Chapter 10: Indictable Offence, Price Discrimination, Geographical Pricing

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 343
• Professor: Jason Ho

Document Summary

Chapter 10 pricing: understanding and capturing customer value. Cutting prices is often not the best answer leads to lost profits and damaging price wars: companies should sell value, not price, by justifying higher price by the greater value that is gained. Design a good product determine product costs set price based on cost convince buyers of product"s value. Assess customer needs/ set target p to match determine costs that design product to deliver desired value at target p value perceptions perceived v. Frequent sales days, early-bird savings, bonus in-store credit: value-added pricing: attaching value-added featu(cid:396)es/se(cid:396)(cid:448)i(cid:272)es to diffe(cid:396)e(cid:374)tiate (cid:272)o(cid:373)pa(cid:374)y"s offe(cid:396)s & (cid:272)ha(cid:396)gi(cid:374)g highe(cid:396) p, adding more amenities and charging more, rather than cutting services and charging less. Cost-based pricing setting prices based on costs for producing/distributing/selling the product + fair rate of return for effort and risk: working with low cost producers helps set lower prices (walmart) Let lower prices with small margins, but greater sales and profits.