Marketing 19

that which is given up in an exchange to acquire a good or service

• 1) to seller, price is revenue
• 2) to consumer, price is cost of something
• 3) price allocates resources in a free market economy

• -objectives include profit maximization, satisfactory profits, and target ROI
• Profit Maximization- setting prices so that total revenue is as large as possible relative to total costs
• Satisfactory Profits-reasonable profit levels
• ROI- most common profit objective. sometimes called firms return on total assets

• based on Market share or Sales maximization
• Market Share- company's product sales as a % of total sales for that industry

pricing objective that maintains existing prices or meets the competition's prices

the quantity of a product that will be sold in the market at various prices for a specified period

the quantity of a product that will be offered to the market by a supplier at various prices for a specific period.

price at which demand and supply are equal

Consumers' responsiveness or sensitivity to changes in price

the cost of buying the product from the producer, plus amounts for profit and for expenses not otherwise accounted for

the practice of marking up prices by 100%, or doubling the cost