Introduction Flashcards
Price definition
Quantity of money or goods and services received by the seller / Quantity of money or goods and services received by the buyer
Other terms for price
e. g.: Rate (postage), Premium (insurance coverage), Tuition (education), Admission (movie), Rent (apartment), Fee (bank account)
What is the price?
a. Base price
b. Discounts, rebates, and special offers
c. Differentiated prices by package size or product variant
d. Differentiated prices based on customer segment, time of day, or location
e. Prices for complementary or substitutive products
f. Prices for additional services
g. Prices with two or more dimensions (e.g., upfront charge and a usage fee)
h. Bundles and prices for individual components
i. Prices based on personal negotiations
j. Manufacturer and consumer prices
The Role of Pricing in Marketing
Consumers evaluate price relative to the product’s value –> Pricing has to consider the marketing mix
The special role of pricing
a. Price changes require no expenditures
b. Price changes can be implemented quickly
c. Price changes have a fast and strong impact on unit sales
d. Competitors often respond quickly to price changes
Environmental pressures
a. Technological progress
b. Proliferation of new products
c. Global competition
d. Importance of supply chain management
e. Consumer price sensitivity
The impact of price on profit
The moment you raise your price you will lose some sales
