Price Flashcards
This is the total amount of money that the seller, considering his objectives, requires in exchange for an article or service he is selling.
Price
______ defined as those activities involved for the determination of the price at which products will be offered for sale considering the various objectives of the firm.
Pricing
1 the determination of the realistic range of choice
2 the selection of pricing strategy
3 the evaluation of economic feasibility
4 the setting of the price
The Pricing Procedure
The Pricing Procedure
Example:
If ballpens are sold at a various prices (from above ₱10, between ₱10 and ₱5, and below ₱5), the price setter will have to find out from the said price information his realistic price range. If a small volume is sold at prices above ₱10 and below ₱5, then his realistic range will be between ₱10 and ₱5.
determination of the realistic range of choice
The Pricing Procedure
the marketer may adopt any of the following:
-market skimming strategy
-penetration strategy
Selection of Pricing Strategy
The Pricing Procedure
Selection of Pricing Strategy
It requires the setting of price at the upper limit of the realistic range of choice.
market skimming strategy
The Pricing Procedure
Selection of Pricing Strategy
calls for setting the price at the bottom of the realistic price range.
penetration strategy
The Pricing Procedure
a list of the various price alternatives must be prepared. Then, a study on the economic feasibility of the alternatives is made.
the evaluation of economic feasibility
The Pricing Procedure
the firm is now ready to set the price for the products.
the setting of the price
PRICING OBJECTIVES (3)
profit-oriented objectives
sales-oriented objectives
status quo-oriented objectives
PRICING OBJECTIVES
profit-oriented objectives
this refers to the pricing objective requiring a certain level of profit. It is stated in terms of percentage of sales or on capital investment.
TARGET RETURN OBJECTIVE
PRICING OBJECTIVES
profit-oriented objectives
This refers to the pricing objective of seeking as much profit as possible. This may be attained by increasing quantity sold or increasing the profit margin.
PROFIT MAXIMIZATION OBJECTIVE
Kinds of Competition
This is a competitive situation where there is only one seller in a market. The monopolist enjoys a very high degree of control over the price of his product. His only worry is pricing is too high to invite competition.
PURE MONOPOLY
Kinds of Competition
Only a few firm compete in the sale of a commodity. These few firms are interdependent in many of their activities including pricing.
OLIGOPOLY
Kinds of Competition
It refers to that market where there are a great number of sellers and buyers. Products sold are regarded as homogenous and the buyers will be motivated to switch from one seller to another because of price.
PURE COMPETITION
