Revenue price charged X units sold

1
Chapter 17

• Revenue price charged X units sold
• Perceived Reasonable Value
• Price Lose in 2 ways
• lost revenue
• lost consumers

2
Chapter 17

• Pricing Objectives (starting point specific,
  attainable measurable)
• 3 Categories
• Profit Maximization
• satisfactory profits level of risk org. takes
• target return on investment
• ROI Net profit after taxes / total assets

3
Chapter 17

• 3 Categories Cont
• Sales Oriented Pricing Objectives
• market shares ( or units)
• sales maximization (rising sales)
• Status Quo Pricing
• meet competition
• passive policy

4
Chapter 17

• Other Price Determinants
• stages in PLC
• Competition
• Distribution Strategy
• Internet, Extranets
• Promotion Strategy
• Quality

5
Chapter 17

• Factors Affecting Elasticity
• Substitutes
• Price Purchasing Power
• Product Durability (fixable vs. throw away)
• Other Uses for Product

6
Chapter 17

• Terms
• Demand Supply
• Elasticity of Demand consumer response /
  sensitivity to changes in price
• Elastic Demand occurs when consumers buy more
  or less because of price change
• Inelastic Demand increases / decreases in price
  do not affect demand
• Unitary Elasticity total revenues remain the
  same with price changes

7
Chapter 17

• Terms (cont)
• Costs
• variable
• fixed
• marginal
• markup cost of buying profit expenses out
  of ordinary
• Keystoning
• Breakeven Analysis
• Selling Against the Brand