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Effective Pricing Strategies for Business Success

Understand the concept of pricing and its impact on maximizing profit and revenue. Learn about pricing strategies like yield management, penetration, and image enhancement. Explore how pricing affects consumer demand and elasticity in the market.

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Effective Pricing Strategies for Business Success

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  1. 4.07 Pricing

  2. Term • Price: amount that customers pay for products and services

  3. SEM Concept of Price • Value of overall experience • Great players/entertainers • Communal event • Chance to interact

  4. Tangible Touchable Items Durable Items Intangible Services Can’t touch or save Benefits

  5. High Prices Maximize profit Low Prices Maximize revenue/ participation High vs. Low Prices Prices based on what market will bear

  6. Price Price Demand Demand Effect of Elasticity Elastic Demand Inelastic Demand

  7. Pricing Strategies • Yield Management: maximize revenue with limited capacity • Penetration: set prices lower than competition • Image Enhancement: set high prices to reflect a premium experience

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