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AS Marketing - Price :explode: (How to determine price? (Competitors…
AS Marketing - Price :explode:
Pricing level
Influences revenue and profit
Reflects on marketing objectives
Determines value added onto bought in materials
Price elasticity of demand (PED)
% change in quantity demanded/ % change in price
Responsiveness of demand following a change in price
Factors determining price elasticity
How many similar competing products or brands
Level of consumer loyalty
How necessary the product is
Price of product as a proportion of consumer income
PED application :
More accurate sales forecasts
Assists in pricing decisions
PED limitations :
Calculating PED accurately
Quickly outdated
How to determine price?
Competitors prices
Business and marketing objectives
Competitive conditions in the market
Price elasticity of demand
Costs of production
Whether its a new or existing product
Pricing methods
Cost-based pricing
Target
Full-cost
Mark-up
Contribution-cost
New products
Penetration pricing
Market skimming
Pricing decisions based on :
Loss leaders
Psychological pricing
Level of competition