Flashcards in Price Deck (20):
Give a general definition for "price"?
What a consumer is willing to give in exchange for something else
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
Outline the 5 factors that influence how the customer perceives price
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
What are the 4 pricing contexts?
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
What is the meaning of price in service markets (2 points)?
It can give an indication of service quality
Lowers perceived risk
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
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
What are the 3 external influences on pricing decisions?
Channels of distribution
What are the 3 factors that a company must consider in pricing decisions?
How should organisational objectives affect price (2 points)?
Price should be in line with objectives
Long term vs short term benefits
How do costs affect price?
Price must as a minimum condition cover the companies costs
How do marketing objectives affect price?
Price discrimination between segments
Outline the 4 pricing objectives?
Maintain market share
What is "harvesting"
The milking of revenues while the product is still profitable
Explain pricings objective to "maintain market share"?
Price can be a strategy to defend a companys position in the market
Explain "growth" as a pricing objective (2 points)?
Used to fund growth
Used by market challengers to steal market share (risky)
Explain "quality leadership" as a pricing objective ?
Helps with positioning in niche markets (indicates quality)