Pricing
Marketing Co-Op
What is price?
Price: the ____________ placed on the goods or services being _______________
Profit Margins: the ________________ of sales the company has left over as _______
after paying all expenses
How do businesses make pricing decisions?
Constant change in the marketplace forces businesses to __________________ pricing
decisions __________________
Four key market factors:
•
•
•
•
___________________________________________________
Supply and demand
___________________________________________________
Competition
Costs and Expenses
An increase in costs and expenses
Example: When __________________ go up you will see an increase in airline
tickets, gas station prices, and shipping costs
There are other ways of bringing costs down so that prices don’t have to be raised
Reducing the _____________ of an item
Example:
Drop features that customers ________________________
Example:
Some companies choose to improve features or upgrade materials in order to justify the
higher price
Example:
A decrease in costs and expenses
__________________ firms are always looking for ways to increase efficiency and
______________ __________
This helps them be __________________ in the marketplace
Improved ___________________ and less expensive materials may help create
____________ ____________ products at a lower price
Break-even point – the point at which _________________ equals the costs and expenses
of ___________ and _________________ a product
After this point businesses will start to _________ _________
Supply and Demand
As the price of a product goes up, what happens to the demand? ____________________
And supply? __________________________
How about when the price goes down? What happens to Demand?
_____________
And supply? __________________________
Consumer Perceptions
Some customers equate price with __________________
They believe a high ________ reflect high _________, status, prestige, and exclusiveness
Companies create this perception by:
• Limiting the supply (ex:Wii)
• ______________________________________________
• Superior customer service or added services for customers
Competition
When two products are very similar, price often is the __________________ on which
customers make their buying decisions.
Customers are _________________ to buy the less expensive brand if they see no
_________________ between the products