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Flashcards in Price Deck (20):
1

Give a general definition for "price"?

What a consumer is willing to give in exchange for something else

2

Explain what price means in the customers perspective

The price should match the value that customers place on the promises made to them my the marketer

3

Outline the 5 factors that influence how the customer perceives price

Functional
Quality
Personal
Operational
Financial

4

Give 3 details about price from the organisations perspective

It is the only "P" that actually generates revenue

It can send messages about quality to customers

It covers many hidden costs required in production

5

What are the 4 pricing contexts?

Consumer Markets

Service Markets

Non-Profit Markets

Organisational Markets

6

Why are customers particularly powerful in consumer markets in developed countries (2 points)?

Because we have already met more essential needs at the lower levels of Maslow's Hierarchy

We are price sensitive and irrational at these higher levels

7

What is the meaning of price in service markets (2 points)?

It can give an indication of service quality

Lowers perceived risk

8

How can price be used in the context of non-profit markets?

Price can be used as a deterrent e.g. national park entry fees / parking fees

Price is also required in order to keep the organisations running

9

How do the pricing contexts in consumer markets differ from organisational markets?

In consumer markets the price is set

In organisational markets the price is negotiated

10

What are the 3 external influences on pricing decisions?

Customers

Channels of distribution

Competitors

11

What are the 3 factors that a company must consider in pricing decisions?

Organisational objectives

Costs

Competitors

12

How should organisational objectives affect price (2 points)?

Price should be in line with objectives

Long term vs short term benefits

13

How do costs affect price?

Price must as a minimum condition cover the companies costs

14

How do marketing objectives affect price?

Price discrimination between segments

15

Outline the 4 pricing objectives?

Harvesting

Maintain market share

Growth

Quality leadership

16

What is "harvesting"

The milking of revenues while the product is still profitable

17

Explain pricings objective to "maintain market share"?

Price can be a strategy to defend a companys position in the market

18

Explain "growth" as a pricing objective (2 points)?

Used to fund growth

Used by market challengers to steal market share (risky)

19

Explain "quality leadership" as a pricing objective ?

Helps with positioning in niche markets (indicates quality)

20

What are the two pricing strategies?

Price Penetration

Market Skimming