UB MGM 301 - Final Exam Study Guide (20 pages)

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Final Exam Study Guide



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Final Exam Study Guide

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A combination of book and lecture based notes with in-depth descriptions of all relevant information.


Pages:
20
Type:
Study Guide
School:
University at Buffalo, The State University of New York
Course:
Mgm 301 - Principles of Marketing
Principles of Marketing Documents

Unformatted text preview:

MGM 301 Final Exam Study Guide Lectures 22 29 Lecture 22 November 10 What is the purpose of price What are the types of competition Name the pricing objectives Explain cost based pricing and profit based pricing Price the money or other considerations including other products and services exchanged for the ownership or use of a product or service The purpose of price is not to recover cost but to capture the value of the product in the consumer s mind Price communicates value Value Perceived benefits Price Value the ratio of perceived benefits to price for a given price as perceived benefits increase value increases ex if you re used to paying 7 for a medium pizza a large one at the same price would be more valuable conversely for a given price value decreases when perceived benefits decrease Types of Competition Price Based not a good way to compete unless one company has a cost advantage Competitors prices are only important if the prospective buyer both knows about those prices and can act to purchase them easily Non Price Based ex Apple vs Dell ad showing the relative advantage of the product as opposed to focusing on the prices of the products Pricing Objectives Pricing objectives involve specifying the role of price in an organization s marketing and strategic plans Profit o Three different objectives relate to a firm s profit which is often measured in terms of return on investment ROI or return on assets ROA o One objective is managing for long run profits where companies give up immediate profit by developing quality products to penetrate competitive markets over the long term products are priced relatively low compared to their cost to develop but the firm expects to make greater profits later because of its high market share o A maximizing current profit objective is common in many firms because the targets can be set and performance measured quickly such as for a quarter or year o A target return objective occurs when a firm sets a profit goal that is



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