Banach Marketing Mix Pricing Concepts
The Five Cs of Pricing
The Five Cs of Pricing
Fichier Détails
Cartes-fiches | 7 |
---|---|
Langue | English |
Catégorie | Marketing |
Niveau | Université |
Crée / Actualisé | 29.03.2014 / 16.11.2020 |
Attribution de licence | Non précisé |
Lien de web |
https://card2brain.ch/box/banach_marketing_mix_pricing_concepts
|
Intégrer |
<iframe src="https://card2brain.ch/box/banach_marketing_mix_pricing_concepts/embed" width="780" height="150" scrolling="no" frameborder="0"></iframe>
|
Price
Definition
The overall sacrifice (Money, Time & Energy) a consumer is willing to make to acquire a specific product or service.
Competition
3 Levels of competition:
Oligopolistic Competition - Only a few firms dominate
- Price changes in reaction to competition.
Monopolistic Competition
- Many firms competing for customers in a given market but their products are differentiated.
Pure Competition - Different companies sell products that consumers perceive as substitutable
- The price usually is set according to supply and demand.
Costs
Variable Costs
- Costs, that vary with production volume. (labor, materials, etc.)
Fixed Costs
- Costs that remain essentially at the same level.
Total Cost
- All variable and fixed costs Combined
Break Even Analysis
Contribution per unit = price - variable cost per unit.
Break Even Point (Units) = Fixed Costs : Contribution per Unit
Customers
Customer Demand = Price elasticity of demand
Measures how changes in a price affect the quantity of product demanded.
Factors influencing Elasticity of Demand
Income Effect
- The change in the quantity of a product demanded by consumers due to a change in their income.
Substitution Effect
- Consumers’ ability to substitute other products for the focal brand.
- The greater the availability of substitute products, the higher the price elasticity of demand.
Cross-Price Elasticity
- The percentage change in demand for product A that occures in response to a percentage change in price of Product B.
- Complementary Products
Channel Members
Manufacturers (Hersteller)
Wholesalers (Großhändler)
Retailers (Einzelhandel)
Company Objectives
Profit Orientation
Target Profit Pricing
- Firms use price to stimulate a certain level of sales at a certain profit per unit. Particular Profit Goal.
Maximizing Profits
- Identify the price at which its profits are maximized.
Target Return Pricing
- pricing strategies to produce a specific return on their investment.
Sales Orientation
- Set Prices very low to generate new sales and take sales away from Competitors, even if Profits suffer.
Competitor Orientation
Competitive Parity: set prices that are similar to those of their major competitors.
Status Quo Pricing, changes prices only to meet those of competition.
Customer Orientation
- Premium Pricing: Increase Value by focosing on customer satisfaction and setting prices to match consumer expectations.