PRICING AND DISCOUNTING
- Created by: lisa_spratling
- Created on: 03-06-17 05:43
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- Pricing & Discounting
- Setting Prices
- Basic cost-based pricing
- Sophisticated market-based pricing
- Cost-based pricing
- Cannot be sure they're maximising profits
- Method is inwardly focused on company information
- Does not take account of what customers are willing to pay
- Market-based pricing
- Assesses what customers are willing to pay
- The company can work out whether it can operate profitably
- Changing price level
- Changes in input costs
- Competitive pressure
- Desire to increase sales or market share
- Needs to understand price elasticity - the effect that a change in price has on sales
- Price-based promotions
- Addiction for many marketers
- Generally do not add new customers
- Only temporary sales effects
- Tend to have a large negative effect on profits
- Setting Prices
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