Management and Organizational Studies 2320A/B Chapter Notes - Chapter 11: Geographical Pricing, Monopolistic Competition, Substitute Good

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2320A/B
• Professor: Emily Chen- Bendle

Document Summary

Chapter 11 - pricing concepts and strategies: value. The five c"s of pricing: company objectives, profit orientation - can be implemented by focusing on target profit pricing, maximizing profits, or target return pricing. Target return pricing - firms less concerned with the absolute level of profits and more interested in the rate at which their profits are generated relative to their investments. Competitive parity - setting prices that are similar to those of major competition: customer orientation - explicitly invokes the concept of customer value and setting prices to match consumer expectations. Elastic - price sensitive and small changes have large effects (more consumers are elastic to price increases, and inelastic to price decreases) Inelastic - price insensitive and small changes won"t have a large impact. Income effect: the change in the quantity of demand because of a change in consumer"s income.