PM--Chapter12Price Determination(营销原理).pptVIP

Chapter 12: Price Determination Chapter 12Price Determination MEANING OF PRICE PRICE is the amount of money and/or other items with utility needed to acquire a product. BARTER is the exchanging goods and/or services for other products but not for money. COMBINATION OF PRICING 1. Good or service 2. Supplementary services (such as a warranty). 3. Want-satisfying benefits provided by the product. ? ?IMPORTANCE OF PRICE 1. In the Economy - Price determines supply and demand for the goods and services. 2. In the Consumer’s Mind - Majority of consumers are somewhat sensitive to price. - Consumers’ perceptions of product quality vary directly with price e.g., high price, high quality. 3. In the Individual Firm - Price affects a firm’s competitive position, revenues, and profits e.g., high price, high profit. ?PRICING OBJECTIVES 1. Profit-Oriented: 1.1 To achieve a target return - on sales or on investment. 1.2 To maximize profit – more beneficial if pursued over the long term ? 2. Sales-Oriented: 2.1 To increase sales volume – occasional loss may incur in the short run 2.2 To maintain or increase market share – saturated industries with excess production capacity. PRICING OBJECTIVES 3. Status Quo Goals 3.1 To stabilize price -- widely used in the industries where: - The product is highly standardized. - One large firm has acted as a leader in price set. 3.2 To meet competition – price cut is likely to be matched but the price boost is unlikely to be matched. FACTORS INFLUENCING PRICE DETERMINATION 1. BASE PRICE or “list price” refers to the price of one unit of the product at its point of production or resale. This price does not reflect any discount or freight charges. 2. Estimated Demand Look for a price that the market expects Estimate the sales volume at different prices EXPECTED PRICE is the price at which customers expect, usually expressed as a range of prices. INVERSE DEMAND is the higher the price, the greater