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BUILDING THE PRICE FOUNDATION

BUILDING THE PRICE FOUNDATION. C HAPTER 13. NATURE AND IMPORTANCE OF PRICE. What is a Price? Barter Price as an Indicator of Value Value-pricing Price in the Marketing Mix Profit Equation. The price of four different purchases. Steps in setting price.

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BUILDING THE PRICE FOUNDATION

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  1. BUILDING THE PRICE FOUNDATION CHAPTER 13

  2. NATURE AND IMPORTANCE OF PRICE • What is a Price? • Barter • Price as an Indicator of Value • Value-pricing • Price in the Marketing Mix • Profit Equation

  3. The price of four different purchases

  4. Steps in setting price

  5. STEP 1: IDENTIFY PRICING CONSTRAINTS AND OBJECTIVES • Identifying Pricing Constraints • Demand for the Product Class, Product, and Brand • Newness of the Product: Stage in the Product Life Cycle • Single Product versus a Product Line • Cost of Producing and Marketing the Product • Cost of Changing Prices and Time Period They Apply • Types of Competitive Markets • Pure monopoly, Oligopoly, Monopolistic competition, Pure competition • Competitors Prices

  6. Pricing, product, and advertising strategies available to firms in four types of . . . markets

  7. STEP 1: IDENTIFY PRICING CONSTRAINTS AND OBJECTIVES • Identifying Pricing Objectives • Profit • Sales • Market Share • Unit Volume • Survival • Social Responsibility

  8. Where each dollar of your movie ticket goes

  9. Illustrative demand curves for Newsweek magazine

  10. STEP 2: ESTIMATE DEMAND AND SERVICE • Fundamentals of Estimating Revenue • Total revenue • Average revenue • Marginal revenue • Demand Curves and Revenue • Price Elasticity of Demand • Price Elasticity for Brands and Product Classes

  11. Fundamental revenue concepts

  12. STEP 3: DETERMINE COST, VOLUME, AND PROFIT RELATIONSHIPS • The Importance of Controlling Costs • Total cost • Fixed cost • Variable cost • Break-Even Analysis • Break-even point

  13. Calculating a break-even point

  14. Break-even analysis chart

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