Revel flashcards: Chapter 7.1, What is the role and perception of price?

1
Q

What is Price?

A
  • The value placed on something.
  • Price is any common currency of value to both buyer and seller.
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2
Q

Factors affecting customers price assessments:

A
  • Functional benefits: relate to the design of the product and its ability to fulfil the desired function
  • Quality: may be impacted by the corporate image.
  • Operational: In B2B markets price may be measured in its ability to impact the production process e.g machinery may be judged on how it affects productivity.
  • Financial: Expected return on investment in B2B markets is a good measure of price.
  • Personal: e.g. improving self image.
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3
Q

Variables affecting the customers perspective:

A
  • Scarcity
  • Solving immediate problems e.g. burst pipe in winter compared to summer.
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4
Q

The seller’s perspective of price:

A
  • Distinct element in the marketing mix as it is the only one that generates revenue.
  • Seller needs to remember that sometimes the cost to the customer of purchasing a product can be much greater than its price.
  • If the rest of the marketing mix has worked well up to the point of sale, then price should not be a great issue.

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5
Q

Why do consumers sometimes feel obliged to pay higher prices?

A

Because they feel obliged to fulfil social expectations.

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6
Q

Why should price be seen as a natural integrated part of the marketing mix?

A

Price should sit in harmony with the rest of the marketing mix elements. It should help present the correct positioning for the product or service.

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