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Pricing. Chapter 19. Pricing. Price Barter Price equation. What is Value?. Value= Perceived benefits/cost Value-pricing Do higher prices= Better products? Profit= Total Revenue- Total Cost. Pricing Process. Step 1: Identify Pricing Constraints. Pricing Constraints Demand Newness

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Presentation Transcript
Pricing

Pricing

Chapter 19


Pricing1
Pricing

  • Price

  • Barter

  • Price equation


What is value
What is Value?

  • Value= Perceived benefits/cost

    • Value-pricing

  • Do higher prices= Better products?

  • Profit= Total Revenue- Total Cost



Step 1 identify pricing constraints
Step 1: Identify Pricing Constraints

  • Pricing Constraints

    • Demand

    • Newness

    • Single product v. Product Line

    • Production and Promotion Costs

    • Costs of Changing Prices

    • Type of Competitive Markets

    • Competitors’ Prices


Step 1 pricing objectives
Step 1: Pricing Objectives

  • Profit

  • Sales

  • Market Share

  • Unit Volume

  • Survival

  • Social Responsibility


Step 2 estimate demand and revenue
Step 2: Estimate Demand and Revenue

  • Demand

    • Demand factors

  • Estimating Revenue

    • Total Revenue

    • Average Revenue

    • Marginal Revenue

    • Price Elasticity


Step 3 determine cost value and profit relations
Step 3: Determine Cost, Value, and Profit Relations

  • Costs

    • Total cost

    • Fixed cost

    • Variable Cost

    • Marginal Cost

  • Break-even Analysis