1 / 30

Marketing 3340 Chip Besio

Marketing 3340 Chip Besio. Quick-take quiz on price: Answers that are part numbers, part good judgment. ( d ) $2.7 trillion. ( b ) fixed cost. ( b ) gasoline. The “price” a buyer pays can take different names depending on what is purchased.

tova
Download Presentation

Marketing 3340 Chip Besio

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Marketing 3340 Chip Besio

  2. Quick-take quiz on price: Answers that are part numbers, part good judgment (d) $2.7 trillion (b) fixed cost (b) gasoline

  3. The “price” a buyer pays can take different names depending on what is purchased

  4. NATURE AND IMPORTANCE OF PRICEPRICE AS AN INDICATOR OF VALUE • Value = $ $ • Value-Pricing

  5. NATURE AND IMPORTANCE OF PRICEPRICE IN THE MARKETING MIX • Profit Equation Profit = Total Revenue – Total Costs = (Unit Price x Quantity Sold) – (Fixed Cost + Variable Cost) • Six Steps in Setting Price

  6. The six steps in setting price

  7. STEP 1: IDENTIFY PRICING OBJECTIVESAND CONSTRAINTSIDENTIFYING PRICING OBJECTIVES • Pricing Objectives • Profit • Managing for Long-Run Profits • Managing for Current Profit • Target Return (ROI) • “The World is Flattening” 13-9

  8. MARKETING MATTERSHow Flattening the World Affects Both Revenuesand Costs: Infosys…IKEA, and You!

  9. STEP 1: IDENTIFY PRICING OBJECTIVESAND CONSTRAINTSIDENTIFYING PRICING OBJECTIVES • Pricing Objectives • Sales ($) • Survival • SocialResponsibility • Market Share ($ or #) • Unit Volume (#) 13-11

  10. STEP 1: IDENTIFY PRICING OBJECTIVESAND CONSTRAINTSIDENTIFYING PRICING CONSTRAINTS • Pricing Constraints • Demand for theProduct Class (Cars),Product (Sports Cars),and Brand (Bugatti Veyron) • Newness of theProduct: Stage in theProduct Life Cycle eBay 13-12

  11. STEP 1: IDENTIFY PRICING OBJECTIVESAND CONSTRAINTSIDENTIFYING PRICING CONSTRAINTS • Single Product vs.a Product Line • Cost of Producing andMarketing a Product • Cost of ChangingPrices and Time PeriodThey Apply

  12. STEP 1: IDENTIFY PRICING OBJECTIVESAND CONSTRAINTSIDENTIFYING PRICING CONSTRAINTS • Type of Competitive Market • Pure Competition • Monopolistic Competition • Oligopoly • Pure Monopoly • Competitors’ Prices

  13. Pricing, product, and advertising strategies available to firms in four types of competitive markets

  14. STEP 2: ESTIMATE DEMANDAND REVENUEFUNDAMENTALS OF ESTIMATING DEMAND • The Demand Curve • Consumer Tastes • Price and Availabilityof Similar Products • Consumer Income • Demand Factors

  15. STEP 2: ESTIMATE DEMANDAND REVENUEFUNDAMENTALS OF ESTIMATING DEMAND • Movement Along vs. aShift of Demand Curve • Movement Alonga Demand Curve • Shift in theDemand Curve 13-17

  16. Demand curves for Newsweek showing the effect on annual sales (quantity demanded per year) by a change in price caused by (A) a movement along and(B) a shift of the demand curve

  17. Demand curve for Newsweek showing the effect on annual sales by a change in price caused by a movement along the demand curve

  18. Demand curve for Newsweek showing the effect on annual sales by a change in price caused by a shift of the demand curve

  19. STEP 2: ESTIMATE DEMANDAND REVENUEFUNDAMENTALS OF ESTIMATING REVENUE • Total Revenue (TR) • Average Revenue (AR) • Marginal Revenue (MR) • Demand Curves and Revenue

  20. FIGURE 13-6 Fundamental revenue concepts

  21. How Newsweek’s downward-sloping demand curve affects total, average, and marginal revenues

  22. MARKETING MATTERSThe Airbus vs. Boeing Face-off—How Many Can We Sell and at What Price…in a $2.7 Trillion Market? • Marketingand Pricing • The Products • Demand

  23. STEP 2: ESTIMATE DEMANDAND REVENUEFUNDAMENTALS OF ESTIMATING REVENUE • Price Elasticity of Demand • Elastic Demand • Inelastic Demand

  24. Clothing and GasolineWhich product is more sensitive to price changes?

  25. STEP 3: DETERMINE COST, VOLUME,AND PROFIT RELATIONSHIPSTHE IMPORTANCE OF CONTROLLING COSTS • Total Cost (TC) • Fixed Cost (FC) • Variable Cost (VC) • Unit Variable Cost (UVC) • Marginal Cost (MC) • Marginal Analysis

  26. Fundamental cost concepts

  27. STEP 3: DETERMINE COST, VOLUME,AND PROFIT RELATIONSHIPSBREAK-EVEN ANALYSIS • Break-Even Analysis • Break-Even Point (BEP) _______Fixed Cost_________ ____FC____ BEPQuantity = Unit Price – Unit Variable Cost = P - UVC

  28. STEP 3: DETERMINE COST, VOLUME,AND PROFIT RELATIONSHIPSBREAK-EVEN ANALYSIS • Break-Even Chart • Applications ofBreak-Even Analysis

  29. Break-even analysis chart for a picture frame store shows the break-even point at 400 pictures

  30. Calculating a break-even point for the picture frame store shows its profit starts at 400 framed pictures per year

More Related