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BUILDING THE PRICE FOUNDATION C HAPTER 13. What is a Price?  Barter Price as an Indicator of Value  Value-pricing Price in the Marketing Mix  Profit.

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Presentation on theme: "BUILDING THE PRICE FOUNDATION C HAPTER 13. What is a Price?  Barter Price as an Indicator of Value  Value-pricing Price in the Marketing Mix  Profit."— Presentation transcript:

1 BUILDING THE PRICE FOUNDATION C HAPTER 13

2 What is a Price?  Barter Price as an Indicator of Value  Value-pricing Price in the Marketing Mix  Profit Equation NATURE AND IMPORTANCE OF PRICE

3 The price of four different purchases

4 Steps in setting price

5 Identifying Pricing Constraints Demand for the Product Class, Product, and Brand Newness of the Product: Stage in the Product Life Cycle Single Product versus a Product Line Cost of Producing and Marketing the Product Cost of Changing Prices and Time Period They Apply Types of Competitive Markets  Pure monopoly, Oligopoly, Monopolistic competition, Pure competition Competitors Prices STEP 1: IDENTIFY PRICING CONSTRAINTS AND OBJECTIVES

6 Pricing, product, and advertising strategies available to firms in four types of... markets

7 Identifying Pricing Objectives Profit Sales Market Share Unit Volume Survival Social Responsibility STEP 1: IDENTIFY PRICING CONSTRAINTS AND OBJECTIVES

8 Where each dollar of your movie ticket goes

9 Illustrative demand curves for Newsweek magazine

10 Fundamentals of Estimating Revenue  Total revenue  Average revenue  Marginal revenue Demand Curves and Revenue Price Elasticity of Demand Price Elasticity for Brands and Product Classes STEP 2: ESTIMATE DEMAND AND SERVICE

11 Fundamental revenue concepts

12 The Importance of Controlling Costs  Total cost  Fixed cost  Variable cost Break-Even Analysis  Break-even point STEP 3: DETERMINE COST, VOLUME, AND PROFIT RELATIONSHIPS

13 Calculating a break-even point

14 Break-even analysis chart


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