Pricing Objectives Survival Most executives pursue strategies that align pricing with revenue generation, enabling their organizations to survive and thrive long term. LEARNING OBJECTIVES Name the different factors that impact a company’s success and survival KEY TAKEAWAYS Key Points New and improved products may hold the key to a firm’s survival and ultimate success. All business enterprises must earn a long term profit in order to survive in the long… Read More »Pricing Objectives

Inputs to Pricing Decisions Marginal Analysis Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs. LEARNING OBJECTIVES Identify the characteristics of a marginal price analysis relative to pricing decision making KEY TAKEAWAYS Key Points Firms tend to accomplish their objective of profit maximization by increasing their production until marginal revenue equals marginal cost. At the output level at which marginal revenue equals marginal cost, marginal… Read More »Inputs to Pricing Decisions

Yield Management Systems Yield management systems enable organizations to adapt pricing in real-time based on various factors impacting demand. LEARNING OBJECTIVES Understand the purpose of projecting demand changes, and varying prices to capture opportunities KEY TAKEAWAYS Key Points Yield management systems are predicated on the idea that demand is not consistent over time for certain types of products and services. Predicting shifts in demand will therefore provide potential value to… Read More »Yield Management Systems

The Influence of Supply and Demand on Price Changes in either supply or demand will move the market clearing point and change the market price for a good. LEARNING OBJECTIVES Apply the basic laws of supply and demand to different economic  scenarios KEY TAKEAWAYS Key Points There are four basic laws of supply and demand. Since determinants of supply and demand other than the price of the good in question… Read More »The Influence of Supply and Demand on Price

Demand Analysis The Demand Curve A demand curve is a graph showing the relationship between the price of a certain item and what consumers are willing to buy at the price. LEARNING OBJECTIVES Define the demand curve KEY TAKEAWAYS Key Points Demand does not only have to do with the need to have a product or a service, but it also involves the willingness and ability to buy it at… Read More »Demand Analysis

Competitive Dynamics and Pricing Price Competition With competition pricing, a firm will base what they charge on what other firms are charging. LEARNING OBJECTIVES Discuss price as a competitive strategy in marketing KEY TAKEAWAYS Key Points Price is a very important decision criteria that customers use to compare alternatives. It also contributes to the company’s position. The pricing process normally begins with a decision about the company’s pricing approach to… Read More »Competitive Dynamics and Pricing

Value and Relative Value Value is the worth of goods, and relative value is attractiveness measured in terms of utility of one good relative to another. LEARNING OBJECTIVES Discuss the different concepts of value and how it influences consumer buying decisions KEY TAKEAWAYS Key Points Value is the worth of goods and services as determined by markets. Something is only worth what someone is willing to pay for it. The… Read More »Value and Relative Value

The Importance of Price to Marketers Since pricing has a direct impact on a company’s revenue, and thus profit, setting the right price is essential to a company’s success. LEARNING OBJECTIVES Discuss how pricing impacts marketing and business strategy KEY TAKEAWAYS Key Points Price is important to marketers because it represents marketers’ assessment of the value customers see in the product or service and are willing to pay for a… Read More »The Importance of Price to Marketers

Terms Used to Describe Price Depending on whether they are describing a good or a service and the product’s industry, people may use terms other than the word price. LEARNING OBJECTIVES Name the different terms used to reference pricing KEY TAKEAWAYS Key Points From a customer’s point of view, value is the sole justification for price. The price of an item is also called the price point, especially when it… Read More »Terms Used to Describe Price

Introduction to Price Defining Price Price is both the money someone charges for a good or service and what the consumer is willing to give up to receive a good or service. LEARNING OBJECTIVES Define price and its relationship to cost KEY TAKEAWAYS Key Points When you ask about the cost of a good or service, you’re really asking how much you will have to give up in order to… Read More »Introduction to Price