MGT 103 Bates Final
__% of ticket sales are now Online - ANS50
Price - ANSthe money or other considerations (think: bartering) exchanged for the ownership or
use of a product or service
Barter - ANSexchanging products and services for other products and services
Calculating the Final Price (Formula) - ANSList Price - (Incentives + allowances) + Extra Fees
College Student ex.
Tution - scholarships + books/housing
Value (Formula) - ANSPercieved Benefits / Price
Value Pricing (strategy) - ANSLowering price while keeping benefits the same
or
Increasing benefits while keeping price the same
Price to Value Relationship - ANSWhen we pay a higher price, we tend to perceive a higher
quality
doesn't mean that people will always be willing to pay a higher price though.
ex) pizza sales example
Profit (Formula) - ANSTotal Revenue - Total Cost
broken down further:
(Unit Price x Quantity Sold) - (Fixed Cost + Variable Cost)
Potential Pricing Objectives - ANS- Sales Revenue
- Market Share
- Unit Volume
- Survival
- Social Responsibility
Sales Revenue - ANSPrice x Quantity sold, money made before factoring in costs
,Market Share - ANSRatio of a firms sales to the industry
- used when sales in an industry are flat or declining
Unit Volume - ANStotal amount sold
- used when trying to bring up consumer demand to match production capacity
Survival - ANSthe process of staying alive
- used when a firm cant match rivals price cuts
Social Responsibility - ANSwhen a firm forgoes greater profits to meet obligations to society
Pricing Constraints - ANSDemand
Newness
Cost of Production
whether Single Product or Product Line
Cost of Changing prices
Type of competitive market
Demand - ANSthe greater the demand, the higher price that can be charged
Newness - ANSproducts can be sold for higher prices earlier in their life cycles
Cost of Production - ANSfirms are forced to price products in a way that ensures their
distribution partners profit as well
Single Product vs Product line - ANSsingle/unique products can be sold for higher price
when a company has a range of similar products they kind of have to stay in line with eachother,
price wise
Cost of Changing Prices - ANScost of updating online sites, catalog retail avenues, etc.
Pure Competition market - ANSmany sellers and consistent market price
(Agriculture- Wheat/Corn)
, same benefit of corn, price is determined by what consumers want to pay
Monopolistic Competition - ANSmany sellers compete on both price, and benefits
(books movies restaurants)
there isnt a consistent price (there is a price range, though) like pure competition since there are
differentiated benefits
Oligopoly - ANSfew sellers that avoid price competition and focus on differentiated benefits
(car manufacturers/banks)
Pure Monopoly - ANSNo price competition and the seller can charge mostly what it wants
(cable TV)
Every Day Low Prices - ANSgives customers a low price 24/7 365. No discounts, no need for
comparison shopping
High/Low pricing - ANSInitially sells a product for high price, then later sells on discount for low
when the product becomes undesirable
Odd/Even pricing - ANS9.98 vs 10
Both are desirable, depending on how the firm wants the product to be perceived as (cheap vs
premium)
Bundle Pricing - ANSMarketing two or more products together as a single package
(get more people to buy fries by throwing in a drink)
Yield Management - ANSCharging different prices to maximize revenue
prices change depending on capacity
(Hotels/airlines)
Standard Markup - ANSadding a fixed percentage to the cost of all items in a specific product
class
(tends to be 10/20/40, manufacturing/wholesaler/retailer, where percentage additions are
calculated ontop of each other, not all at once)
Cost Plus Pricing - ANSsumming the total unit cost of providing a product or service and adding
a specific amount to the cost in order to arrive at a price
ex. how a contractor will charge a percentage of the cost of all goods as his own fee
__% of ticket sales are now Online - ANS50
Price - ANSthe money or other considerations (think: bartering) exchanged for the ownership or
use of a product or service
Barter - ANSexchanging products and services for other products and services
Calculating the Final Price (Formula) - ANSList Price - (Incentives + allowances) + Extra Fees
College Student ex.
Tution - scholarships + books/housing
Value (Formula) - ANSPercieved Benefits / Price
Value Pricing (strategy) - ANSLowering price while keeping benefits the same
or
Increasing benefits while keeping price the same
Price to Value Relationship - ANSWhen we pay a higher price, we tend to perceive a higher
quality
doesn't mean that people will always be willing to pay a higher price though.
ex) pizza sales example
Profit (Formula) - ANSTotal Revenue - Total Cost
broken down further:
(Unit Price x Quantity Sold) - (Fixed Cost + Variable Cost)
Potential Pricing Objectives - ANS- Sales Revenue
- Market Share
- Unit Volume
- Survival
- Social Responsibility
Sales Revenue - ANSPrice x Quantity sold, money made before factoring in costs
,Market Share - ANSRatio of a firms sales to the industry
- used when sales in an industry are flat or declining
Unit Volume - ANStotal amount sold
- used when trying to bring up consumer demand to match production capacity
Survival - ANSthe process of staying alive
- used when a firm cant match rivals price cuts
Social Responsibility - ANSwhen a firm forgoes greater profits to meet obligations to society
Pricing Constraints - ANSDemand
Newness
Cost of Production
whether Single Product or Product Line
Cost of Changing prices
Type of competitive market
Demand - ANSthe greater the demand, the higher price that can be charged
Newness - ANSproducts can be sold for higher prices earlier in their life cycles
Cost of Production - ANSfirms are forced to price products in a way that ensures their
distribution partners profit as well
Single Product vs Product line - ANSsingle/unique products can be sold for higher price
when a company has a range of similar products they kind of have to stay in line with eachother,
price wise
Cost of Changing Prices - ANScost of updating online sites, catalog retail avenues, etc.
Pure Competition market - ANSmany sellers and consistent market price
(Agriculture- Wheat/Corn)
, same benefit of corn, price is determined by what consumers want to pay
Monopolistic Competition - ANSmany sellers compete on both price, and benefits
(books movies restaurants)
there isnt a consistent price (there is a price range, though) like pure competition since there are
differentiated benefits
Oligopoly - ANSfew sellers that avoid price competition and focus on differentiated benefits
(car manufacturers/banks)
Pure Monopoly - ANSNo price competition and the seller can charge mostly what it wants
(cable TV)
Every Day Low Prices - ANSgives customers a low price 24/7 365. No discounts, no need for
comparison shopping
High/Low pricing - ANSInitially sells a product for high price, then later sells on discount for low
when the product becomes undesirable
Odd/Even pricing - ANS9.98 vs 10
Both are desirable, depending on how the firm wants the product to be perceived as (cheap vs
premium)
Bundle Pricing - ANSMarketing two or more products together as a single package
(get more people to buy fries by throwing in a drink)
Yield Management - ANSCharging different prices to maximize revenue
prices change depending on capacity
(Hotels/airlines)
Standard Markup - ANSadding a fixed percentage to the cost of all items in a specific product
class
(tends to be 10/20/40, manufacturing/wholesaler/retailer, where percentage additions are
calculated ontop of each other, not all at once)
Cost Plus Pricing - ANSsumming the total unit cost of providing a product or service and adding
a specific amount to the cost in order to arrive at a price
ex. how a contractor will charge a percentage of the cost of all goods as his own fee
