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Marketing 7th Canadian Edition

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Marketing 7th Canadian Edition

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    1. Marketing 7th Canadian Edition

    3. Understand the nature and importance of pricing products and services. Recognize the constraints on a firm’s pricing latitude and the objectives a firm has in setting prices. Explain what a demand curve is and what price elasticity of demand means. Perform a break-even analysis. Understand approaches to pricing as well as factors considered to establish prices for products and services. Describe basic laws and regulations affecting pricing practices.

    4. HERE’S A PRICING PROBLEM FOR YOU! Confederation Bridge Joins PEI with New Brunswick 12.9 km long Cost $1 Billion What price do you charge users who might want to cross it?

    5. What is a Price? Barter Price as an Indicator of Value Value-pricing Price in the Marketing Mix Profit Equation Profit = Total revenue - Total cost

    6. FIGURE 13-1 The price of four different purchases

    7. FIGURE 13-2 Steps in setting price

    8. Identifying Pricing Constraints Cost of Producing and Marketing the Product Demand for the Product Class, Product, and Brand Newness of the Product: Stage in the Product Life Cycle Single Product versus a Product Line

    9. Identifying Pricing Constraints (cont.) Cost of Changing Prices and Time Period They Apply Types of Competitive Markets Pure monopoly Oligopoly Monopolistic competition Pure competition Competitors’ Prices

    10. FIGURE 13-3 Pricing, product, and advertising strategies available to firms in four types of competitive markets

    11. Identifying Pricing Objectives Profit Sales Market Share Unit Volume Survival Social Responsibility

    12. FIGURE 13-4 Where each dollar of your movie ticket goes

    14. Fundamentals of Estimating Demand The Demand Curve Consumer tastes Price and availability of other products Consumer income

    15. Fundamentals of Estimating Demand (cont.) Movement Along versus Shift of a Demand Curve Price Elasticity of Demand

    16. FIGURE 13-5 Illustrative demand curves for Newsweek magazine

    17. Fundamentals of Estimating Revenue Total revenue Total Profit = Total Revenue - Total Cost

    18. The Importance of Controlling Costs Total cost Fixed cost Variable cost

    19. Break-Even Analysis Break-even point (BEP) Calculating a Break-Even Point Break-even chart Application of Break-Even Analysis Using Microsoft Excel to answer hypothetical “what-if” questions.

    20. FIGURE 13-6 Calculating a break-even point

    21. FIGURE 13-7 Break-even analysis chart for a picture frame shop

    22. Demand-Oriented Approaches Skimming Pricing Penetration Pricing Prestige Pricing Price Lining Odd-Even Pricing Target Pricing Bundle Pricing Yield Management Pricing

    23. FIGURE 13-8 Four approaches for selecting an approximate price level

    24. Cost-Oriented Approaches Standard Markup Pricing Cost-Plus Pricing Experience Curve Pricing

    25. Profit-Oriented Approaches Target Profit Pricing Target Return-on-Sales Pricing Target Return-on-Investment Pricing

    26. Competition-Oriented Approaches Customary Pricing Above- At- or Below- Market Pricing Loss-Leader Pricing

    27. One-Price versus Flexible-Price Policy Company, Customer, and Competitive Effects Company Effects Product-line pricing Customer Effects Competitive Effects Price war

    28. Discounts Quantity Discounts Seasonal Discounts Trade (Functional) Discounts Cash Discounts

    29. Allowances Trade-In Allowances Promotional Allowances Everyday low pricing

    30. Geographical Adjustments FOB Origin Pricing Uniform Delivered Pricing

    31. Legal and Regulatory Aspects of Pricing Price Fixing Price Discrimination Deceptive Pricing Delivered Pricing Predatory Pricing

    32. FIGURE 13-9 Five most common deceptive pricing practices

    41. Profit = total revenue – Total cost, or Profit = (Unit Price x Quantity Sold) – Total Cost Profit Equation

    42. Factors that limit the latitude of price a firm may set. Pricing Constraints

    43. Expectations that specify the role of price in an organization’s marketing and strategic plans. Pricing Objectives

    44. The summation of points representing the maximum number of products consumers will buy at a given price. Demand Curve

    45. The total money received from the sale of a product. Total Revenue

    46. The percentage change in quantity demanded relative to a percentage change in price. Price Elasticity of Demand

    47. The total expense incurred by a firm in producing and marketing a product. Total cost is the sum of fixed cost and variable cost. In physical distribution decisions, the sum of all applicable costs for logistical activities. Total Cost

    48. The sum of expenses of the firm that are stable and do not change with the quantity of product that is produced and sold. Fixed Cost

    49. The sum of the expenses of the firm that vary directly with the quantity of product that is produced and sold. Variable Cost

    50. A technique that analyses the relationship between total revenue and total cost to determine profitability at various levels of output. Break-Even Analysis

    51. Setting a low initial price on a new product to appeal immediately to the mass market. Penetration Pricing

    52. The money or other considerations (including other goods and services) exchanged for the ownership or use of a good or service. Price

    53. The highest initial price that customers really desiring the product are willing to pay. Skimming Pricing

    54. Setting prices based on pricing of similar products in the market. Above-, At-, or Below-Market Pricing

    55. The marketing of two or more products in a single “package” price. Bundle Pricing

    56. Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price. Cost-Plus Pricing

    57. Setting prices dictated by tradition, standardized channels of distribution, or other competitive factors. Customary Pricing

    58. Pricing method based on production experience, that is, the unit cost of many products and services declines by 10 to 30 percent each time a firm’s experience at producing and selling them doubles. Experience Curve Pricing

    59. Selling products below their customary prices to attract attention to them in the hope that customers will buy other products as well. Loss-Leader Pricing

    60. Setting prices a few dollars or cents under an even number. Odd–Even Pricing

    61. Setting a high price on a product to attract quality- or status-conscious consumer. Prestige Pricing

    62. Pricing a line of products at a number of different specific pricing points. Price Lining

    63. Adding a fixed percentage to the cost of all items in a specific product class. Standard Markup Pricing

    64. The practice of deliberately adjusting the composition and features of a product to achieve the target price to consumers. Target Pricing

    65. Pricing method based on an annual target of a specific dollar volume of profit. Target Profit Pricing

    66. Setting prices to achieve return-on-investment (ROI) targets. Target Return-on-Investment Pricing

    67. Setting typical prices that will give a firm a profit that is a specific percentage. Target Return-on-Sales Pricing

    68. The charging of different prices to maximize revenue for a set amount of capacity at any given time. Yield Management Pricing

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