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CHAPTER 11 - Coggle Diagram
CHAPTER 11
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Penetration Pricing
The method discourages entry by competition, because larger margins do not appear possible.
Helps a company quickly build sales figures and establish a larger market share, and provides time for consumers to develop brand, product, and company loyalty
The company can later allow the price to increase,especially if elasticity remains low
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Cost-based pricing
Cost-based pricing begins with a careful assessment of all costs associated with producing and selling an item
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Cost-plus pricing
Cost-plus pricing involves setting the product's price based on fixed costs, variable costs, plus the desired profit margin for each item
Cost-plus pricing can be employed in cases where costs are unknown or hard to predict, and when company leaders want to ensure a certain level of profit regardless of the costs incurred
The nature of price
A price is the amount a person, company, or government charges for a good or service
For products moving through the market channel, the first price will be the one offered by a
manufacturer to middlemen, typically wholesalers and distributors
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Profit-based pricing
Profit-based pricing examines pricing from the perspective of what consumers are willing to pay rather than the cost of the item
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Break-even analysis
A common method employed to discover the relationships between costs and price is a break-even analysis
Markup pricing
Markup pricing offers a straightforward pricing method that adds a standard markup to the costs assigned to a product
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