Chapter 4: Elasticity According to the Law of Demand, all other
... revenue test, firms can determine how a change in price will affect the total revenue of the company. When demand for a product is relatively inelastic and the firm raises the price, the total revenue increases because the firm keeps most of its customers. But if a firm faces elastic demand for its ...
... revenue test, firms can determine how a change in price will affect the total revenue of the company. When demand for a product is relatively inelastic and the firm raises the price, the total revenue increases because the firm keeps most of its customers. But if a firm faces elastic demand for its ...
The Pan Paradigm of Business Analysis
... product and the amount of product consumers want to buy. This relationship is indirect because as prices go up, people buy less of that particular product. It is referred to as the Law of Demand. ...
... product and the amount of product consumers want to buy. This relationship is indirect because as prices go up, people buy less of that particular product. It is referred to as the Law of Demand. ...
Prices Marketing Strategies - Universitatea George Bacovia
... • the products are of a great innovation and offer customers clear advantages; patents or brevets on which they are based are strongly protected by law; • there are sufficient barriers for the newly entered competitors; • investments in new products are great, etc.. 2. The Strategy of Maintaining Pr ...
... • the products are of a great innovation and offer customers clear advantages; patents or brevets on which they are based are strongly protected by law; • there are sufficient barriers for the newly entered competitors; • investments in new products are great, etc.. 2. The Strategy of Maintaining Pr ...
World of Marketing
... be looking for in 3-5 years? – What capabilities does our firm have that set it apart from the competition? – What additional customer groups might provide important segments for us in the future? – What legal issues may affect our business? – Technology/Environment? ...
... be looking for in 3-5 years? – What capabilities does our firm have that set it apart from the competition? – What additional customer groups might provide important segments for us in the future? – What legal issues may affect our business? – Technology/Environment? ...
Marketing - BA Dresden
... Advertising is the communication of information about a product or service to it s market, usually in a persuasive manner, using the printed and spoken word and visual material. However good the message put over by advertising, there is no substitute for the face-to-face meeting or personal selling. ...
... Advertising is the communication of information about a product or service to it s market, usually in a persuasive manner, using the printed and spoken word and visual material. However good the message put over by advertising, there is no substitute for the face-to-face meeting or personal selling. ...
Principles of Marketing May 2013 Exam paper
... The greater the suppliers’ power, the stronger the competitive pressures The stronger the customers’ power, the more competitive is the environment If it is easy to enter a market or if there is a likelihood that the market is becoming attractive to new players, the market will become competitive Ne ...
... The greater the suppliers’ power, the stronger the competitive pressures The stronger the customers’ power, the more competitive is the environment If it is easy to enter a market or if there is a likelihood that the market is becoming attractive to new players, the market will become competitive Ne ...
Pricing Strategies
... • Product quality and image must support the price • Buyers must want the product at the price • Costs of producing the product in small volume should not cancel the advantage of higher prices • Competitors should not be able to enter the market easily ...
... • Product quality and image must support the price • Buyers must want the product at the price • Costs of producing the product in small volume should not cancel the advantage of higher prices • Competitors should not be able to enter the market easily ...
Center for Public Health Nutrition
... • Positioning of product or service – Statement that distinctly defines the product in its market and against its competition over time ...
... • Positioning of product or service – Statement that distinctly defines the product in its market and against its competition over time ...
Product, Promotion, Distribution, and Pricing Learning Objectives
... market at a very low price. Everyday pricing is a strategy used to gain long term profitability through volume. Walmart and Costco are two good examples. High/low pricing is a strategy to get the consumer in a retail store. The store will place an item on sale to attract consumers and increase the p ...
... market at a very low price. Everyday pricing is a strategy used to gain long term profitability through volume. Walmart and Costco are two good examples. High/low pricing is a strategy to get the consumer in a retail store. The store will place an item on sale to attract consumers and increase the p ...
Factors affecting whether businesses m ting
... product to the needs of the niche market, rather than compromise between the needs of many any different groups of consumers – this gives the products a USP and allows the business to charge more Targeting customers – It can be easier for businesses to target customers and promote their products eff ...
... product to the needs of the niche market, rather than compromise between the needs of many any different groups of consumers – this gives the products a USP and allows the business to charge more Targeting customers – It can be easier for businesses to target customers and promote their products eff ...
Answers
... stage, which is often far too late to make a significant impact on a product that is too expensive to make. Costs per unit are often lower under a target costing environment. This enhances profitability. Target costing has been shown to reduce product cost by between 20% and 40% depending on product ...
... stage, which is often far too late to make a significant impact on a product that is too expensive to make. Costs per unit are often lower under a target costing environment. This enhances profitability. Target costing has been shown to reduce product cost by between 20% and 40% depending on product ...
TOWSE PAGINATION (M2613).indd
... To get started, imagine a simple case where consumers may differ in their willingness to pay for general admission, but there is no discernible way to classify consumers in terms of their demand for ‘rides’ (to proceed with the amusement park example). Then the profit-maximizing strategy is (1) set ...
... To get started, imagine a simple case where consumers may differ in their willingness to pay for general admission, but there is no discernible way to classify consumers in terms of their demand for ‘rides’ (to proceed with the amusement park example). Then the profit-maximizing strategy is (1) set ...
Marketing - Department of Agricultural Economics
... The supply elasticity for a consumer good is 1.35 and the demand elasticity for the same good in absolute terms is 0.58. If the government places and excise tax upon this good, which group bears more of the tax burden, the producer or the consumer? ...
... The supply elasticity for a consumer good is 1.35 and the demand elasticity for the same good in absolute terms is 0.58. If the government places and excise tax upon this good, which group bears more of the tax burden, the producer or the consumer? ...
Marketing Minute ~ How `selling things` has changed.
... pricing wasn‟t as important. Value refers to the perception of benefits received for what someone must give up, or price. A customer‟s perceived value of a product or service will be affected by a marketer‟s pricing decision. Value = perceived benefits received divided by perceived price paid The pr ...
... pricing wasn‟t as important. Value refers to the perception of benefits received for what someone must give up, or price. A customer‟s perceived value of a product or service will be affected by a marketer‟s pricing decision. Value = perceived benefits received divided by perceived price paid The pr ...
High Tech Strategy II
... Disruptive technologies typically have worse performance, at least in the near term. But: They have features that a few fringe and generally new customers value and which represent a key source of competitive value in the future. Products based on them are typically cheaper, simpler, smaller and fre ...
... Disruptive technologies typically have worse performance, at least in the near term. But: They have features that a few fringe and generally new customers value and which represent a key source of competitive value in the future. Products based on them are typically cheaper, simpler, smaller and fre ...
Slide 1
... Strategic pricing has three aspects Predatory pricing - the profit gained in one market is used to support aggressive pricing designed to drive competitors out, in another market 2. Multi-point pricing - a firm’s pricing strategy in one market may have an impact on a rival’s pricing strategy in anot ...
... Strategic pricing has three aspects Predatory pricing - the profit gained in one market is used to support aggressive pricing designed to drive competitors out, in another market 2. Multi-point pricing - a firm’s pricing strategy in one market may have an impact on a rival’s pricing strategy in anot ...
barriers to entry
... industry, it has developed a cost advantage over potential entrants. It might use this advantage to cut prices if and when new suppliers enter the market, moving away from short run profit maximisation objectives - but designed to inflict losses on new firms and protect its market position in the lo ...
... industry, it has developed a cost advantage over potential entrants. It might use this advantage to cut prices if and when new suppliers enter the market, moving away from short run profit maximisation objectives - but designed to inflict losses on new firms and protect its market position in the lo ...
4.2 Marketing Planning Part 1 PPT
... If your product is not available at the right time and place, customers cannot buy it. Where might you make purchases? How is “PLACE” changing? ...
... If your product is not available at the right time and place, customers cannot buy it. Where might you make purchases? How is “PLACE” changing? ...
product life cycle
... Promotion emphasizes brand ads Goal is wider distribution Prices normally fall Development costs are recovered ...
... Promotion emphasizes brand ads Goal is wider distribution Prices normally fall Development costs are recovered ...
4.2 Marketing Planning
... If your product is not available at the right time and place, customers cannot buy it. Where might you make purchases? How is “PLACE” changing? ...
... If your product is not available at the right time and place, customers cannot buy it. Where might you make purchases? How is “PLACE” changing? ...
Service parts pricing
Service Parts Pricing refers to the aspect of Service Lifecycle Management that deals with setting prices for service parts in the after-sales market. Like other streams of Pricing, Service Parts Pricing is a scientific pursuit aimed at aligning service part prices internally to be logical and consistent, and at the same time aligning them externally with the market. This is done with the overarching aim of extracting the maximum possible price from service parts and thus maximize the profit margins. Pricing analysts have to be cognizant of possible repercussions of pricing their parts too high or too low in the after-sales market; they constantly have to strive to get the prices just right towards achieving maximum margins and maximum possible volumes.The after-sales market consists of service part and after-sales service. These areas often account for a low share in total sales, but for a relatively high share in total profits. It is important to understand that the after-sales supply chain is very different from the manufacturing supply chain, and hence rules that apply to pricing manufacturing parts do not hold good for pricing service parts. Service Parts Pricing requires a different outlook and approach.Service networks deal with a considerably higher number of SKUs and a heterogeneous product portfolio, are more complex, have a sporadic nature of demand AND have minimal response times and strict SLAs. Companies have traditionally been content with outsourcing the after-sales side of their business and have encouraged third-party parts and service providers in the market. The result has been a bevy of these operators in the market with strict price competition and low margins.Increasingly, however, companies are realizing the importance of the after-sales market and its impact on customer retention and loyalty. Increasingly, also, companies have realized that they can extract higher profit margins from the after-sales services market due to the intangible nature of services. Companies are investing in their after-sales service networks to deliver high levels of customer service and in return command higher prices for their parts and services. Customers are being sold the concept of total cost of ownership (TCO) and are being made to realize that buying from OEMs comes packaged with better distribution channels, shorter response times, better knowledge on products, and ultimately higher product uptime.The challenge for companies is to provide reliable service levels in an environment of uncertainty. Unlike factories, businesses can’t produce services in advance of demand. They can manufacture them only when an unpredictable event, such as a product failure, triggers a need. The challenge for Service Parts Pricing is to put a value to this customer need. Parts that are critical, for example, can command higher prices. So can parts that only the OEM provides in the market. Parts that are readily available in the market cannot, and must not, be priced to high. Another problem with after-sales market is that demand cannot be stimulated with price discounts, customers do not stock up service parts just because they are on discount. On the up-side, the fact that most service parts are inelastic means pricing analysts can raise prices without the adverse effects that manufacturing or retail networks witness.These and other characteristics of the after-sales market give Service Parts Pricing a life of its own. Companies are realizing that they can use the lever of service part pricing to increase profitability and don't have to take prices as market determined. Understanding customer needs and expectations, along with the company's internal strengths and weaknesses, goes a long way in designing an effective service part pricing strategy.