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WEEK 9 - Coggle Diagram
WEEK 9
Determining Demand
Demand (in-elasticity, elasticity) relates to customers actually wanting to purchase or even needing to purchase particular goods or services.
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How much does the product cost? What are the competitor alternatives within the market? What else can the customer’s money be spent on?
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Tactical pricing options that are based on pricing determinants such as production cost, demand, pricing policies, competitors and profit margins)
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Differential pricing strategies set different prices for different markets (drink prices in bars and cinemas)
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Covering the overhead costs, plus a percentage on top, to meet marketing/profit objectives.
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Summary
The critical success factors in relation to price are to maintain the organisational objectives, yet endeavour to remain sensitive to the needs of the customers.
In order to achieve a marketing oriented approach to pricing, the organisation should take into account a broad range of factors including marketing strategy, value proposition, price-quality relationships, competitive pricing, costs etc.
The process of distribution is costly, complex and logistically challenging and will often involve many different groups of people or organisations.
Selection of the appropriate channel can give organisations the competitive edge over others by reaching customers in new and more innovative ways, particularly with the increasing use of the Internet.
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