The amount of money charged for a product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service
The only element in the marketing mix that produces revenue; all other elements represent costs
Value-based Pricing (major pricing strategies)
Uses the buyers' perceptions of value, not the sellers cost, as the key to pricing. Price is considered before the marketing program is set.
-Value-based pricing is customer driven
-Cost-based pricing is product driven
Everyday :ow pricing (EDLP)
Charging a constant everyday low price with few or no temporary price discounts
Charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items
Attaches value-added features and services to differentiate offers, support higher prices, and build pricing power
Costs that do not vary with production or sales level:
Adds a standard markup to the cost of the product
Sellers are certain about costs
Prices are similar in industry and price competition is minimized
Buyers feel it is fair
Ignores demand and competitor prices
-Setting prices based on competitors' strategies, costs, prices, and market offerings.
-Consumers will base their judgments of a product's value on the prices that competitors charge for similar products.
Starts with an ideal selling price based on consumer value considerations and then targets costs that will ensure that the price is met