BADM533
University of The Cumberlands
BADM533 - M51 Marketing Management
Chapter 9. Pricing.
Marketing, we believe, is the exchange of advantages and expenses between a customer
and a business. However, the majority of the marketing 4Ps are directed outward, with the firm
seeking to provide value to the consumer by producing a good product, making it available
through accessible channels, and effectively explaining the product's merits. Price, on the other
hand, gives the business a way to get value back from customers (Iacobucci, 2018). Marketers
must understand how to establish pricing. Prices must be established according to the brand's
positioning, whether it's on the cheap end or the high end (Iacobucci, 2018). Marketers must
understand how customers perceive pricing and price changes, such as promotions, in order to
predict how they will be perceived and impact demand. Finally, we'll look at how pricing may be
used to categorize customers.
There are two concerns with cheap prices: First, how can we know if expenses are
covered? To answer this fundamental question, we'll use a number of break-even calculations—
simple arithmetic calculations that tell us how many units we need to sell to break even. The
second pricing question is if low prices are a consistent strategic decision, such as for daily low
price providers (EDLPs) that promote excellent value in the minds of customers. Should we jolt
the market with price changes, providing and rescinding temporary price reductions? (Iacobucci,
2018).
University of The Cumberlands
BADM533 - M51 Marketing Management
Chapter 9. Pricing.
Marketing, we believe, is the exchange of advantages and expenses between a customer
and a business. However, the majority of the marketing 4Ps are directed outward, with the firm
seeking to provide value to the consumer by producing a good product, making it available
through accessible channels, and effectively explaining the product's merits. Price, on the other
hand, gives the business a way to get value back from customers (Iacobucci, 2018). Marketers
must understand how to establish pricing. Prices must be established according to the brand's
positioning, whether it's on the cheap end or the high end (Iacobucci, 2018). Marketers must
understand how customers perceive pricing and price changes, such as promotions, in order to
predict how they will be perceived and impact demand. Finally, we'll look at how pricing may be
used to categorize customers.
There are two concerns with cheap prices: First, how can we know if expenses are
covered? To answer this fundamental question, we'll use a number of break-even calculations—
simple arithmetic calculations that tell us how many units we need to sell to break even. The
second pricing question is if low prices are a consistent strategic decision, such as for daily low
price providers (EDLPs) that promote excellent value in the minds of customers. Should we jolt
the market with price changes, providing and rescinding temporary price reductions? (Iacobucci,
2018).
