Lesson 1- Pricing

Lesson 1 – Pricing Objectives: Name factors that affect pricing. Identify pricing objectives and methods. Describe customer perception regarding price.

Price Price- The value place on a product Factors that affect price: Cost of making the product Cost of running the business Price competitors charge Demand for the product

Pricing Objectives One objective of pricing is to make a profit, but there are other objectives to consider... Maximize profits Increase market share Match the competition

Competition-oriented Pricing Methods Businesses generally apply a combination of three basic pricing methods: Cost-oriented Demand-oriented Competition-oriented

Customer Perception It’s hard to know for sure if you’ve found the right price until you consider how the customer perceives it. Ask students to think about a time when price affected their purchase.

Customer Perception Digital camera $2,000 Dinner for two at a cafe $50 Concert t-shirt $28 How do students perceive the prices on this slide? Too high? Too low? Just right? Have the students explain why they made the choice that they did.

Lesson 1 – Pricing Summary: Name factors that affect pricing. Identify pricing objectives and methods. Describe customer perception regarding price.