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.
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.
3
Q
Variables affecting the customers perspective:
A
- Scarcity
- Solving immediate problems e.g. burst pipe in winter compared to summer.
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.
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.