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Chapter 10 - Coggle Diagram

- - - - cut prices
      - offer discounts
    - - a boom or recession
      - inflation
      - interest rates
  - - - Demand curve: A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged
      - Most companies try to measure their demand curves by estimating demand at different prices
      - In a monopoly, the demand curve shows the total market demand resulting from different prices
    - - Price elasticity: A measure of the sensitivity of demand to changes in price
      - If demand hardly changes with a small change in price, we say demand is inelastic
      - If demand changes greatly, we say the demand is elastic
    - - oligopolistic competition
        
        the market consists of a few sellers
        
        each seller is alert and responsive to competitors’ pricing strategies and moves
      - monopolistic competition
        
        the market consists of many buyers and sellers trading over a range of prices
        
        each firm is less affected by competitors’ pricing strategies
      - pure competition
        
        No single buyer or seller has much effect on the going market price
        
        the market consists of many buyers and sellers trading in a uniform commodity
      - pure monopoly
        
        the market is dominated by one seller
        
        Pricing is handled differently in each case
- - - - variable costs
        
        vary directly with the level of production
      - total costs
        
        the sum of the fixed and variable costs for any given level of production
      - fixed costs
        
        do not vary with production or sales level
    - - SRAC : short run average costs curve
      - LARC: Long run average costs curve
    - - costs plus pricing
        
        adding a standard markup to the cost of the product
        
        unit cost =variable cost + fixed cost / unit sales
      - break-even analysis and target profit pricing
        
        setting price to break even on the cost of marketing and marketing a product or setting price to make a target return
        
        break-even volume =fixed cost / (price-variable cost)
  - - - be certain to give customers superior value for that price.
  - - - attaching value-added features and services to differentiate a company's offer and changing higher prices
    - - offering just the right combination of quality and good service at a fair price
- - - - play an important role in helping to accomplish company objectives at many levels
    - - coordinated with product design, distribution, and promotion decisions
    - - position products on price
        
        tailor other marketing mix decisions to the prices want to charge
    - - Pricing starts with an ideal selling price
        
        targets costs that will ensure that the price is met
    - - rarely buy on price alone
      - seek products that give them the best value in terms of benefits received for the prices paid
  - - - prices are often set by top management
    - - pricing is handled by divisional or product managers
    - - salespeople may be allowed to negotiate with customers within certain price ranges
    - - often have pricing departments to set the best prices or help others set them