MKT 327 Introduction to Marketing 1st Edition Lecture 23 Pricing Strategies Outline of Last Lecture A. Essence of marketingI. E-CommerceII. E-Commerce value creationIII. Website designIV. Unique capabilities of internet activity Outline of Current Lecture B. PricingV. Four basic price decisionsCurrent LecturePURPOSE>>IMPACT ON VALUE CREATION>> ADVANTAGES & DISADVANTAGES:1) PRICING a) Pricing impacts possession utility directly, but also b) Communicates information about form, time, and place utilities. c)Price plays many roles in an organization beyond marketing. i) It is the avenue for recovering costs. ii) It also is a source of competitive advantage. iii) From a marketing perspective price helps establish value, and achieve desired marketing position. iv) The total price concept recognizes that the price of an object reflects more than just monetary costs, but also effort, time, and tradeoffs with respect to other products. Generally price is influenced by market factors, cost factors, financial factors, legal factors, and customer factors.2) Four basic price decisions: a) Objectives i) Purpose These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.(1) Is to specify the overall impact the price of the product or service will have on the firm’s strategic objectives and positioning. (2) There are four options for this decision: (a) Profit, (b) Volume, (c) Competitive, (d) And relationship(e) An option is selected based on the criterion of the corporate objective. b) Orientationi) Specifies the discipline or theoretical base that will be used to actually calculate the specific price that will be assigned to a product or service. ii) There are three options: (1) Cost based (value calculated at end); (2) Demand based (value not calculated), (3) And value based (value calculated at beginning). c)Strategy i) Specify how prices will be generally initiated and managed/changed over the life of the product. ii) There are three basic options: (1) Skimming, (2) Penetration, (3) And competitive. (4) An option is chosen based on six selection criteria: (a) Stage in life cycle, (b) Length of life cycle, (c) # Of competitors, (d) Lead time/competitive advantages, (e) Economies of scale, (f) And nature of demandiii) The impact on value creation from pricing and promotion and distribution are often coordinated through pull, push, or push-pull strategies.d)
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