intro to marketing mr. bernstein pricing strategy, pp 526-581 november 19-20, 2014
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Intro to Marketing
Mr. Bernstein
Pricing Strategy, pp 526-581
November 19-20, 2014
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Factors Affecting Price (pp 526-536)Costs – Fixed or VariableSupply and DemandConsumer PerceptionsCompetitionWhat are your objectives?
Return on InvestmentGaining Market ShareCash Flow / Survival
Legal / Ethical Issues
Intro to MarketingMr. Bernstein
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Pricing Strategy Approaches (pp 544-551)Cost-Based Pricing
Cost plus markupDemand-Based Pricing
“What the market will bear”Competition-Based Pricing
“Price Takers”Flexible or One-Price PolicyWhat causes pricing strategy to change over time?
Intro to MarketingMr. Bernstein
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Pricing Techniques (pp 552-559)Psychological pricing:
Prestige pricingOdd/even pricingPrice lining
Promotional pricingMultiple Unit discountsBundle pricing
Intro to MarketingMr. Bernstein
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How often should pricing be revised?Elastic demand – revise oftenDo you compete primarily on price, service or
quality?
Intro to MarketingMr. Bernstein
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Analyzing Pricing (pp 566-581)Break-even Analysis: Number of units that must be
sold to cover fixed costs
Fixed Costs / (Unit Selling Price – Variable Costs) = Break-Even Point
Intro to MarketingMr. Bernstein
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Analyzing PricingMarkup: Amount added to the cost of an item
Cost + Markup = PriceMarkup / Cost = Percentage Markup
AKA “Gross Margin”; doesn’t include overhead costs
Intro to MarketingMr. Bernstein