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UA / Marketing / MKT 300 / marketing channels delivering customer value

marketing channels delivering customer value

marketing channels delivering customer value

Description

School: University of Alabama - Tuscaloosa
Department: Marketing
Course: Marketing
Professor: Susan fant
Term: Spring 2015
Tags: MKT, MKT 300, and Marketing
Cost: 25
Name: MKT 300 Week 7 Notes
Description: These notes cover chapters 10 and 12.
Uploaded: 03/04/2016
10 Pages 227 Views 1 Unlocks
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Principles of MarketingWe also discuss several other topics like What law states that volume and temperature have a constant pressure?

Kotler and Armstrong

Chapter 10: Pricing

Understanding and capturing customer valueIf you want to learn more check out hermaphadites

PricingDon't forget about the age old question of What is a super position?

Learning objectives

  • Objective 1: Answer the question “What is a price?” and discuss the importance of pricing in today’s fast - changing environment
  • Objective 2: Identify the three major pricing  strategies and discuss the importance of understanding customer - strategies when setting prices
  • Objective 3: identify and define the other important external and internal factors affecting a firm’s pricing decisions

**Do not have to do equations on the testDon't forget about the age old question of What is a longitudinal, flexible rod between digestive tube and nerve chord?

What is a Price?

Price is the amount of money changed for a product or service, or the sum of all the values that customers exchange for the benefits of having or using the product or service

        Value for value

If you want to learn more check out cuitlahuac meaning

Major Pricing Strategies

**Need to Know**

If you want to learn more check out Wat are the 3 roman senators?

        Price floor vs. price ceiling

Major Pricing Strategies

Customer Value - Based Pricing

Value - based pricing uses the buyers’ perception of value rather than the seller’s cost.

  • Value - based pricing is customer driven
  • Cost - based pricing is product driven
  • Price is set to match perceived value

        Example: “Freemium” vs Premium

Major Pricing Strategies

Customer Value - Based Pricing

Good - value pricing is offering just the right combination of quality and good service at a fair price

        Example: Grocery store examination

Major Pricing Strategies

Customer Value - Based Pricing

**Walmart**

Everyday low pricing (EDLP)

Involves charging a constant everyday low price with few or no temporary price discounts

        Opposite: Luxury goods

Major Pricing Strategies

Customer Value - Based Pricing

High - low pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items

        Example: Bed Bath and Beyond, Hobby Lobby, etc

Major Pricing Strategies

Customer Value - Based Pricing

Value - added pricing attaches value - added features and services to differentiate the companies offers and thus their higher prices

        Example: Alabama shirt plus name on back

Major Pricing Strategies

Cost - Based Pricing

Cost - based pricing sets prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk

  • Trying to cover cost
  • Harder to sell

Major Pricing Strategies

Cost - Based Pricing

Fixed costs are the costs that do not vary with production or sales levels (rent, heat, interest, executive salaries, etc)

variable costs vary directly with the level of production (raw materials, packaging. etc)

Total costs are the sum of a fixed and variable costs for any given level of production

        TC = FC + VC

Major Pricing Strategies

Cost - Based Pricing

Cost - plus pricing adds a standard markup to the cost of the product

  • Benefits
  • Sellers are certain about costs
  • Price competition is minimized
  • Buyers feel it is fair
  • Disadvantages
  • Ignores demand and competitor prices

Major Pricing Strategies

Cost - Based Pricing

Break - even pricing (target return pricing) is setting price to break even on cost or to make a target return

        TR = TC

“Have to spend money to make money”

Major Pricing Strategies

Cost - Based Pricing

Competition based pricing is setting prices based on competitors’ strategies, cost, prices, and market offerings

Other internal and external considerations affecting price decisions

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