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Pricing

Pricing. Chapter 13. Pricing. Price Barter Price equation. What is Value?. Value= Perceived benefits/price Value-pricing Do higher prices= Better products? Price= Total Revenue- Total Cost. Pricing Process. Identify Pricing Constraints Estimate Demand and Revenue

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Pricing

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  1. Pricing Chapter 13

  2. Pricing • Price • Barter • Price equation

  3. What is Value? • Value= Perceived benefits/price • Value-pricing • Do higher prices= Better products? • Price= Total Revenue- Total Cost

  4. Pricing Process • Identify Pricing Constraints • Estimate Demand and Revenue • Determine Cost, Volume, and Profit Relationships • Select an Approximate Price Level • Set List or Quote Price • Make Special Adjustments to List or Quoted Price

  5. Step 1: Pricing Constraints • Pricing Constraints • Demand • Newness • Single product v. Product Line • Production and Promotion Costs • Costs of Changing Prices • Type of Competitive Markets • Competitors’ Prices

  6. Step 1: Pricing Objectives • Profit • Sales • Market Share • Unit Volume • Survival • Social Responsibility

  7. Step 2: Estimate Demand and Revenue • Demand • Demand factors • Estimating Revenue • Total Revenue • Average Revenue • Marginal Revenue • Price Elasticity

  8. Step 3: Determine Cost, Value, and Profit Relations • Costs • Total cost • Fixed cost • Variable Cost • Marginal Cost • Break-even Analysis

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