国际商务英语week 7 price

PricingConceptsCopyright©HoughtonMifflinCompany.Allrightsreserved.PowerPointPresentationbyCharlieCook21PartSixPricingDecisionsCopyright©HoughtonMifflinCompany.Allrightsreserved.21–2ChapterOutline•TheNatureofPrice•PriceandNonpriceCompetition•AnalysisofDemand•Demand,Cost,andProfitRelationships•FactorsAffectingPricingDecisions•PricingforBusinessMarketsCopyright©HoughtonMifflinCompany.Allrightsreserved.21–3TheNatureofPrice•Price–Thevalueexchangedforproductsinamarketingexchange•TermsUsedtoDescribePrice–Tuition,premium,fine,fee,fare,toll,rent,commission,dues,deposit,tips,interest,taxesCopyright©HoughtonMifflinCompany.Allrightsreserved.21–4TheNatureofPrice(cont’d)•TheImportanceofPricetoMarketers–Itisthemostreadilychangeablecharacteristic(underfavorablecircumstances)ofaproduct.–Itisakeyelementinthemarketingmixbecauseitrelatesdirectlytogenerationofrevenuesandquantitiessold.–Itisakeycomponentoftheprofitequation,havingstrongeffectonthefirm’sprofitability.–Ithassymbolicvaluetocustomers—prestigepricing.CostsTotal-RevenuesTotalProfit=CostsTotal-Sold)Quantityx(PriceProfits=Copyright©HoughtonMifflinCompany.Allrightsreserved.21–5PriceandNonpriceCompetition•PriceCompetition–Emphasizingpriceandmatchingorbeatingcompetitors’prices–Aneffectivestrategyinmarketswithstandardizedproducts–Lowest-costcompetitor(seller)willbemostprofitable.–Allowsmarketerstorespondquicklytocompetitors–Pricewarscanweakencompetingorganizations.Copyright©HoughtonMifflinCompany.Allrightsreserved.21–6PriceandNonpriceCompetition(cont’d)•NonpriceCompetition–Emphasizingfactorsotherthanpricetodistinguishaproductfromcompetingbrands•Distinctiveproductfeatures•Service•Productquality•Promotion•Packaging–Advantageisinincreasingbrand’sunitsaleswithoutchangingprice.–Iseffectivewhenaproductorservice’sfeaturesaredifficulttoimitatebycompetitorsandcustomersperceivetheirvalue–BuildscustomerloyaltybyfocusingonnonpricefeaturesCopyright©HoughtonMifflinCompany.Allrightsreserved.21–7AnalysisofDemand•TheDemandCurve–Agraphofthequantityofproductsexpectedtobesoldatvariousprices–Decreasesinpricecreateincreasesinquantitiesdemanded.–Increaseddemandmeanslargerquantitiessoldatthesameprice.–Prestigeitemssellbestinhigherpriceranges.Copyright©HoughtonMifflinCompany.Allrightsreserved.21–8ElasticityofDemandFIGURE20.3Copyright©HoughtonMifflinCompany.Allrightsreserved.21–9TypesofCostsCostFixedcostsCoststhatdonotvarywithchangesintheunitsproducedorsoldAveragefixedcostThefixedcostperunitproducedVariablecostsCoststhatvarydirectlywithchangesinthenumberofunitsproducedorsoldAveragevariablecostThevariablecostperunitproducedTotalcostThesumofaveragefixedandaveragevariablecoststimesthequantityproducedAveragetotalcostThesumoftheaveragefixedcostandtheaveragevariablecostMarginalcost(MC)TheextracostafirmincursbyproducingonemoreunitofaproductCopyright©HoughtonMifflinCompany.Allrightsreserved.21–10Copyright©HoughtonMifflinCompany.Allrightsreserved.21–11CombiningtheMarginalCostandMarginalRevenueConceptsforOptimalProfitFIGURE20.6Copyright©HoughtonMifflinCompany.Allrightsreserved.21–12BreakevenAnalysis•BreakevenPoint–Thepointatwhichthecostsofproducingaproductequaltherevenuemadefromsellingtheproduct–ThepointafterwhichprofitabilitybeginsCostsFixedtoContributionUnit-PerCostsFixedBreakevenPoint=CostsUnitVariable–PriceUnitCostsFixedTotalBreakevenPoint=Copyright©HoughtonMifflinCompany.Allrightsreserved.21–13FIGURE20.7DeterminingtheBreakevenPointCopyright©HoughtonMifflinCompany.Allrightsreserved.21–14FIGURE20.8FactorsThatAffectPricingDecisionsCopyright©HoughtonMifflinCompany.Allrightsreserved.21–15FactorsAffectingPricingDecisions•OrganizationalandMarketingObjectives–Pricesshouldbesetthatareconsistentwiththeorganization’sgoalsandmission.–Pricesmustbecompatiblewithmarketingobjectives(e.g.,settingpremiumpricestoenhanceaproduct’squalityimage).•TypesofPricingObjectives–Settingpriceslowtoincreasemarketshare–Usingtemporarypricereductionstogainmarketshare–LoweringpricestoraisecashquicklyCopyright©HoughtonMifflinCompany.Allrightsreserved.21–16FactorsAffectingPricingDecisions(cont’d)•Costs–Setafloorprice—productsmustbesoldabovetheircostsifthefirmistoremaininbusiness.–Reducingcostsincreasesproductivityandprofitability.•Usinglabor-savingtechnologies•Focusingonquality•Establishingefficientmanufacturingprocesses•OtherMarketingMixVariables–Price/qualityimageoftheproductorbrand–Selectiveorintensiveproductdistribution–ProductpricingusedasapromotionaltoolCopyright©HoughtonMifflinCompany.Allrightsreserved.21–17FactorsAffectingPricingDecisions(cont’d)•ChannelMemberExpectations–Tomakeaprofitatleastequivalenttothepotentialprofitfromhandlingacompetitor’sbrand–Toearnaprofitcommiseratewiththeeffortandresourcesthechannelmemberexpendsontheproduct–Toreceivediscountsforvolumepurchasesandpromptpayment–Tobesupportedbytheproducerwithtraining,advertising,salespromotion,andreturnpoliciesCopyright©HoughtonMifflinCompany.Allrightsreserved.21–18FactorsAffectingPricingDecisions(cont’d)•Customers’InterpretationandResponse–Whatmeaningdoestheproduct’spricehave