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Pricing

Learn how to effectively set prices for your products or services by understanding pricing constraints, objectives, demand, revenue estimation, and cost analysis. Discover the importance of value perception and profit relations in pricing decisions.

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Pricing

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  1. Pricing Chapter 19

  2. Pricing • Price • Barter • Price equation

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

  4. Pricing Process

  5. Step 1: Identify 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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