MKTG 301 Chapter Notes - Chapter 9: Dynamic Pricing, Customer Retention, Geographical Pricing
Document Summary
Price: the amount charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service. Price is the only element in the marketing mix that produces revenue and is the most flexible. Also the number 1 problem facing many marketing executives. Customer perceptions of the product"s value set the ceiling for its price, if price is greater than value > customers will not buy. Product costs set the floor for the product cost, if price is lower than product costs < company profits will suffer. Effective customer oriented pricing involves understanding how much value consumers place on the benefits they receive and setting a price that captures value. Customer value-based pricing: setting price based on buyers" perceptions of value rather than on the seller"s costs. Price is considered along with all other marketing mix variables before the marketing program is set.
