1. 20 - 1 © 1997 South-Western College Publishing LHM Slides Created and Designed by Apple Mountain Software, Inc. http://www.apmtnsoft.com Marketing Charles W. Lamb, Jr. Joseph F. Hair, Jr. Carl McDaniel Chapter 20: Pricing Concepts Chapter 20: Pricing Concepts

2. 20 - 2 © 1997 South-Western College Publishing LHM The Importance of Price Comparisons with New Products Price Concerns of Marketing Managers Price Concerns of Marketing Managers Comparisons Against Private Label and Generic Brands Consumer Price Sensitivity Market Share Pressures on Price

3. 20 - 3 © 1997 South-Western College Publishing LHM Pricing Objectives Price- Oriented Sales- Oriented Status Quo

4. 20 - 4 © 1997 South-Western College Publishing LHM The Demand Determinant of Price D D Quantity Price ($)

5. 20 - 5 © 1997 South-Western College Publishing LHM Elasticity of Demand D D Quantity Price ($) D D Quantity Price ($) Elastic Demand Inelastic Demand

6. 20 - 6 © 1997 South-Western College Publishing LHM Cost Determinants of Price 0 12345678910 50 100 150 200 Dollars Quantity MC ATC AVC AFC

7. 20 - 7 © 1997 South-Western College Publishing LHM Break-Even Analysis Quantity (units) Price ($) Fixed Costs Total Revenue Total Costs Profits Losses Break Even