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    CH 14 Basic PPT Slides

    Uploaded by

    Kanha Batra
    Marketing Grewal Levy

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    CH 14 Basic PPT Slides

    Uploaded by

    Kanha Batra
    148 views18 pages
    Marketing Grewal Levy

    Original Title

    Ch 14 Basic PPT Slides

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    © © All Rights Reserved

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    PPTX, PDF, TXT or read online from Scribd

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    Marketing Grewal Levy

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    148 views18 pages

    CH 14 Basic PPT Slides

    Uploaded by

    Kanha Batra
    Marketing Grewal Levy

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 18

    Chapter 14

    Pricing Concepts for Establishing


    Value

    McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
    Learning Objectives

    Learning Objective 14.1 List the four pricing orientations.

    Learning Objective 14.2 Explain the relationship between


    price and quantity sold.

    Learning Objective 14.3 Explain price elasticity.

    Learning Objective 14.4 Describe how to calculate a


    products break-even point.

    Learning Objective 14.5 Indicate the four types of price


    competitive levels.

    2
    McGraw-Hill Education
    The 5 Cs of Pricing

    3
    McGraw-Hill Education
    1st C: Company Objectives

    Example of Pricing Strategy


    Company Objective
    Implications
    Profit-oriented Institute a companywide policy that all
    products must provide for at least an
    18 percent profit margin to reach a
    particular profit goal for the firm.
    Sales-oriented Set prices very low to generate new
    sales and take sales away from
    competitors, even if profits suffer.
    Competitor-oriented To discourage more competitors from
    entering the market, set prices very
    low.
    Customer-oriented Target a market segment of consumers
    who highly value a particular product
    benefit and set prices relatively high
    (referred to as premium pricing).
    4
    McGraw-Hill Education
    PROGRESS CHECK (1 of 4)

    1. What are the five Cs of pricing?


    2. Identify the four types of company objectives.

    5
    McGraw-Hill Education
    2nd C: Customers

    Jump to Appendix 1 long 6


    image description
    McGraw-Hill Education
    Demand Curves

    Prestigious products
    or services have
    upward sloping
    curves.

    Not all demand


    curves are
    downward sloping

    7
    McGraw-Hill Education
    Price Elasticity of Demand (1 of 2)

    Elastic
    (price sensitive)

    Inelastic
    (price insensitive)

    Consumers are less


    sensitive to price
    increases for necessities
    8
    McGraw-Hill Education
    Factors Influencing
    Price Elasticity of Demand

    Cross-
    price Income
    elasticity effect

    https://www.youtube.com/watch?v=H3TZ-8rhpVQ
    Substitution
    effect

    9
    McGraw-Hill Education
    PROGRESS CHECK (2 of 4)

    1. What is the difference between elastic demand


    and inelastic demand?
    2. What are the factors influencing price elasticity?

    10
    McGraw-Hill Education
    3rd C: Costs

    Variable Costs
    Vary with production volume

    Fixed Costs
    Unaffected by production volume

    Total Cost
    Sum of variable and fixed costs

    11
    McGraw-Hill Education
    Break-Even Analysis and Decision Making

    Jump to Appendix 2 long 12


    image description
    McGraw-Hill Education
    Break Even Analysis

    Total Variable Cost = Variable Cost per unit X Quantity


    Total Cost = Fixed Cost + Total Variable Cost
    Total Revenue = Price X Quantity

    Fixed Costs
    Break-Even Point (units) =
    Contribution per unit

    Jump to Appendix 3 long 13


    image description
    McGraw-Hill Education
    PROGRESS CHECK (3 of 4)

    1. What is the difference between fixed costs and


    variable costs?
    2. How does one calculate the break-even point in
    units?

    14
    McGraw-Hill Education
    4th C: Competition

    Jump to Appendix 4 long


    image description 15
    McGraw-Hill Education Photos (top to bottom): Steve Cole/Getty Images RF; Corbis RF; Ingram Publishing/SuperStock RF; Brand X Pictures/PunchStock RF
    PROGRESS CHECK (4 of 4)

    1. What are the four different types of competitive


    environments?

    16
    McGraw-Hill Education
    5th C: Channel Members

    Manufacturers,
    wholesalers and
    retailers can have
    different perspectives
    on pricing strategies

    Manufactures must
    protect against gray
    market transactions

    17
    McGraw-Hill Education S K D/Alamy
    Marketing
    Chapter 14
    The End

    The End

    McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.

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