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The flashcards below were created by user
bwood190
on FreezingBlue Flashcards.
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Value
- Benefit of something to us
- tangible, intangible
- All about PERCEPTION
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Price
exchange value of a good or service in the mkt place
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Influences on Price
- Supply and demand
- Consumers
- Nature of Mkt
- Channel
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Supply and Demand
- quantity of a product within a mkt and demand for a particular product will effect the price.
- high supply + low demand = low $
- low suppl + high demand = high $
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Price Elasticity of Demand
- measures effect of a price change on quantity purchased
- Elastic (fast food)
- Inelastic (Medicine)
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Elastic
- Change in price a disproportionate change in volume
- Eg fast food
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Inelastic
- Change in price does not have a significant impact on volume purchased
- Eg. Hockey tickets
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Monopoly
- Single seller of a unique product
- competition act prevents monopolies
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Oligopolistic Mkt
- only a few dominant sellers of a particular product
- no differentiation b/w products
- competition is intense, carefully watch competitors
- EG. ROBELUS, gas stations
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Monopolistic Competition
- many competitors selling different products
- differentiation b/c prime focus
- usually a dominant seller
- application of mkt mix b/c big focus
- eg. Nike, Sony
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Pure Competition
- commodities
- many competitors, >1000
- Not perceived as different by consumers
- mkt sets price, not seller
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Pricing Objectives
- Maximize profits (increase investment returns)
- Maximize sales volume
- Establish a competitive position
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MSLP
- Manufacterers Suggested List Price
- retailer must have one in order to reference a price reduction
- price claims can mislead if they don't refer to MSLP
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Bait and Switch
advertising a product which is not readily available or not available in reasonable quantity
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Predatory Pricing
- large firm intentionally lowers price to undercut all other competitors and place them in a difficult financial position and even drive them out of business
- Suffer loses to make competitors suffer
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Price Fixing
- competitors conspire to raise, lower or stabilize prices
- this creates a monopoly
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Double Ticketing
when >1 price is on a product, company must sell product for the lowest price
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Channel Members
- any org that contributes in flow of product from creation to consumer
- mkting, sales efforts, manufacturers, suppliers, retail
- suppliers - manufacturer - distributor - consumer
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Mkting Channel
refers to all orgs channel members
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Total Product Costs
raw materials, manufacturing, transportation + profit margin = total cost price
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How to increase profit?
- Decrease expenses
- improve efficiency
- use less expensive raw materials
- shrink the size of the product
- relocate manufacturing facilities
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Psychological Pricing (odd even, prestige pricing)
- wants consumer to purchase on emotional level, not rational thought
- eg. 9.99 vs 10, apple = prestige
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Product Line
- develop a product line rather than a single product and offer many products w/i line
- Eg. Sony offers many TVs
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Optional Feature Pricing
- Companies increase interest and spending once consumer buys
- optional extras increase overall price
- eg. cell phone plans, cars
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Captive Product Pricing
- use a captive product which captures consumer attention
- eg. Telus gives away TV w/ contract sign
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Product Bundle Packaging, Value Pricing
- seller combines several products at same time at same price
- also serves to move old stock and recession
- eg. Cell phone companies to sell phone package. McDonalds
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Promotional Pricing
- temporarily lower price to get attention
- multiple pricing used to stimulate multiple purchases
- eg. bogo, 25% off. 2 for $10 vs single price points
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Geographical Pricing
- used when variations in price affect different parts of the world
- eg. high shipping costs, high price to absorb the cost
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