Marketing Chapter 14 Arriving at the Final Price
Marketing Chapter 14 Arriving at the Final Price Mar 250
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This 3 page Class Notes was uploaded by Emanuel Nunez on Tuesday March 29, 2016. The Class Notes belongs to Mar 250 at Pace University taught by Professor Topol in Spring 2016. Since its upload, it has received 11 views. For similar materials see Principles of Marketing in Marketing at Pace University.
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Date Created: 03/29/16
Marketing Chapter 14: Arriving at the Final Price Midterm: 10 questions on chapter 14, 1012 questions on other chapters. Different demandoriented pricing approaches: Oddeven pricing, target pricing, Bundle pricing, and yield management pricing. These are pricing at different levels. Oddeven pricing involves setting prices a few dollars or cents under an even number. Example: $5.99 or $5.95. Bundle pricing involves selling more than one product in a “bundle” or package. Example: a happy meal. Involves the marketing of two or more products in a single package price. Target pricing first, estimating the price that ultimate consumers would be willing to pay for a product. Second, working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers and then third, deliberate adjusting the composition and features of the product to achieve the target price to consumers. Retail cost is the same as the wholesaler’s price. Example: Manufacturers mark up: $112.50 Manufacturers selling price $562.50/.60 (retailer wants a 40% margin. Manufacturer’s cost to produce a laptop is $450. Divide .75 from it. Since they want a 25% profit. CostOriented Pricing Approaches: Standard Markup Pricing Cost Selling Price CostPlus Pricing CostPlus Percentageofcost pricing Costplus FixedFee Pricing Experience Curve Pricing CompetitionOriented Pricing Approaches Customary Pricing Above, at, or belowMarket Pricing most companies will charge their customers a similar price to their competitors if they are providing a similar service. LossLeader Pricing trying to use the low price of one product to attract customers. You lose a little in sale and make up for it in volume. Pricepremium % = Dollar Sales Market Share for a Brand Unit Volume Market Share Fixed Price Policy example: family dollar, car max. Dollar stores are growing in numbers because of a basis of success. Customers are looking for more value. Family Dollar is among one of the largest chains. When the recession occurred in 2008, people bought products from this store because they sold similar products to what they usually got before the recession. Dynamic Pricing Policy Product Line Pricing three items in a product line. Example: $5, $10, $20 are prices for three items in a product line. Customer effects of pricing- how do customers influence pricing? Supply and demand. Less demand is a decrease in prices. Competitive effects on prices: Price Wars when a competitor cuts their prices to get rid of their merchandise to run the other competitor out of business. Then the competitor does the same thing and the cycle repeats itself and the results are vicious. Three special adjustments to list or quoted price include discounts, allowances, and geographical adjustments. Legal and Regulatory Aspects of Pricing Price Discrimination such as different movie theaters selling tickets at different prices. Deceptive Pricing hidden fees when a product is purchased Geographical Pricing Predatory Pricing the practice of charging a very low price for a product with the intent of driving competitors out of business. Chapter 14 is interrelated with chapter 13.