国际商务英语week 7 price.ppt

Pricing Concepts Chapter Outline The Nature of Price Price and Nonprice Competition Analysis of Demand Demand, Cost, and Profit Relationships Factors Affecting Pricing Decisions Pricing for Business Markets The Nature of Price Price The value exchanged for products in a marketing exchange Terms Used to Describe Price Tuition, premium, fine, fee, fare, toll, rent, commission, dues, deposit, tips, interest, taxes The Nature of Price (cont’d) The Importance of Price to Marketers It is the most readily changeable characteristic (under favorable circumstances) of a product. It is a key element in the marketing mix because it relates directly to generation of revenues and quantities sold. It is a key component of the profit equation, having strong effect on the firm’s profitability. It has symbolic value to customers—prestige pricing. Price and Nonprice Competition Price Competition Emphasizing price and matching or beating competitors’ prices An effective strategy in markets with standardized products Lowest-cost competitor (seller) will be most profitable. Allows marketers to respond quickly to competitors Price wars can weaken competing organizations. Price and Nonprice Competition (cont’d) Nonprice Competition Emphasizing factors other than price to distinguish a product from competing brands Distinctive product features ? Service Product quality ? Promotion ? Packaging Advantage is in increasing brand’s unit sales without changing price. Is effective when a product or service’s features are difficult to imitate by competitors and customers perceive their value Builds customer loyalty by focusing on nonprice features Analysis of Demand The Demand Curve A graph of the quantity of products expected to be sold at various prices Decreases in price create increases in quantities demanded. Increased demand means larger quantities sold at the same price. Prestige items sell best in higher price ranges. Elasticity of Demand Types of Costs Combining the Marginal Cost and Mar