goals that describe what an organization wants 2 achieve through pricing efforts.
can focus on several dimensions, including maintaining a certain market share, meeting competitors' prices, achieving price stability, or maintaining a favorable public image.
market normally results in charging a high price 2cover the high product quality&, perhaps, the high cost of research& development.
Selection of a Basis for Pricing
three major dimensions on which prices can be based are cost, demand,&competition.
an organization determines price by adding a dollar amount or a percentage 2 the cost of the product.
a method whereby the seller's costs are determined, & then a specified dollar amount or percentage of the cost is added 2 the seller's cost 2 establish the price.
a product's price is derived by adding a predetermined percentage of the cost, called "markup," 2 the cost of the product.
customers pay a higher price when demand 4 the product is strong& a lower price when demand is weak.
Selection of a Pricing Strategy
an approach or a course of action designed to achieve pricing& marketing objectives. help marketers solve the practical problems of establishing prices.
charging different prices 2 different buyers 4 the same quality & quantity of product.
setting one price 4 the primary target market & a different price 4 another market.
a necessary part of formulating a marketing strategy & is one of the most fundamental decisions in the marketing mix.
is setting the price lower than competing brands 2 penetrate a market & quickly gain a significant market share.
establishing & adjusting prices of multiple products within a product line. A marketer's goal here is 2 maximize profits 4 an entire product line rather than 2 focus on the profitability of an individual product.
involves pricing the basic product in a product line low, but pricing related items that are required 2 operate or enhance it at a higher level.
often used when a product line contains several versions of the same product of different quality. It entails giving higher quality or more versatile products the highest prices.
occurs when a marketer prices an item in the product line low with the intention of selling a higher-priced item in the line.
the organization sets a limited number of prices 4 selected groups or lines of merchandise.
attempts 2 influence a customer's perception of price 2 make the product's price more attractive.
pricing a product at a moderate level & positioning it next 2 a more expensive model or brand.
the packaging together of two or more usually complementary products 2 be sold 4 a single price.
occurs when two or more of the same product are packaged together & sold 4 a single price.
Everyday Low Prices (EDLP)
setting a low price 4 products on a consistent basis, rather than setting high prices & frequently discounting them.
involves ending a price with certain numbers than influence the buyers' perceptions of the price or the product.
prices are set at an artificially high level 2 convey a prestigious or quality image.
used by people with great skill or experience in a particular field or activity.
advertised sales or price cutting is used 2 increase sales volume & is linked 2 a holiday, season, or special event.