1. How much are you willing to pay?

2. 

3.   Price is defined as the value placed on the goods or services being exchanged PRICE:

4.   The cost of providing the product or service  The profit that companies hope to make  Demand for the product  Supply of the product  What is the Competition charging? Factors Affecting Pricing

5.  CD Costs and Profit

6.  Movie Theatre http://www.howstuffworks.com/movie- distribution2.htm

7.  Popcorn Saves Theatres Profit 85% Cost 15%

8.  Limited Supply High Demand

9.  Supply and Demand

11.  In Line with Competition

12.   A pricing strategy is defined as:  A plan which determines the best (at the time of making) pricing decision. Pricing Strategy

13.   Importance of:  Know the market  Elasticity  Keeping an eye on rivals Pricing Strategy

14.   Estimating Consumer Demand  Consumer Tastes  Consumer Income Knowing the Market

15.   Is the measure of the responsiveness of demand and supply of a good or service to an increase or decrease in its price. Elasticity

16.  Competitors  The availability of substitute sports or entertainment product  How easily can we be replaced ?  Accessibility to the consumer

17. 

18.   Three main pricing strategies: 1.Market skimming 2.Penetration pricing 3.Competitive pricing Pricing Strategies

19.  Think! Pair! Share!  In pairs, brainstorm what you think each pricing strategy means.  Come up with examples of sports or entertainment products or companies that use these strategies  Join another pair, and discuss your answers  As a class each group of 4 will present their findings Pricing Strategies

20.   Setting a very high price for a new product when demand is greater than supply Skimming

21.   Setting a low price for a new product to attract many customers to try the product and to obtain a large share of the market in a short time  Example: Nintendo consciously chose a penetration strategy when it introduced its GameCube video game console. GameCube was priced at substantially less than Microsoft’s Xbox and Sony’s PlayStation 2 consoles. Penetration

22.   Products in particular category match or follow the price of their competitors very closely Competitive Pricing