marketing 8

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the_student
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217799
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marketing 8
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2013-05-05 04:57:02
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  1. 6 considerations in setting prices for new products
    • 1. Stage in Product Life Cycle
    • 2. Targeting & Positioning Strategy
    • 3. Level of Competition
    • 4. Elasticity of Demand for the Product
    • 5. Production Costs
    • 6. Skimming vs. Penetration Strategy
  2. 3 price orientations
    •  Price-Conscious – striving to pay to lowest
    • price
    •  Value-Conscious – concerned about price
    • relative to quality and features
    •  Prestige-Conscious- drawn to higher status
    • products
  3. positioning vs. competition
    • Consider Premium Pricing….
    • If you are positioning as “better than”
    • If you are in a “niche” market without
    • competitors
    • Consider Lower Prices….
    • If you have an actual advantage in producing
    • goods at a lower cost
    • If you a positioning against a major
    • competitor with high prices
  4. Price Elasticity of demand
    •  A measure of the sensitivity of demand to
    • changes in price
    •  Demand is deemed inelastic when pricing
    • changes by “X%” and demand changes by a
    • smaller percentage
    •  Demand is deemed elastic when pricing
    • changes by “X%” and demand changes by
    • the same or a larger percentage
  5. break even point
    •  The point at which the costs of producing a
    • product equal the revenue made from selling
    • the product
  6. numbers needed to determine breakeven point
  7.  Price
    •  Fixed Costs – Costs that do not vary with
    • changes in the number of units produced or
    • sold
    •  Average Variable Costs – The average variable
    • cost per unit produced
  8. reference price
    •  Reference prices are used by consumers and
    • sellers to establish value
    •  Internal RP- A price developed in the buyer’s
    • mind through experience with the product
    •  External RP– A comparison price provided by
    • others, including product sellers. Ie: The
    • manufactures suggested retail price.
  9. skimming vs. penetration
    •  Market-Skimming – Setting a high price to
    • take advantage of the demand for the new
    • product and the lack of competition.
    •  Market- Penetration- Setting a low price to
    • secure larger market share before
    • competition gets to the market

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