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CHAPTER 12 Pricing Fundamentals OVERVIEW: This chapter introduces basic pricing concepts and issues. First, we explore the nature and importance of pricing. Next, we discuss price and nonprice competition. Then, we discuss demand curves, demand fluctuations, and assessment of price elasticity of demand. Next, we explore marginal analysis and breakeven analysis. We also identify and examine various factors that affect marketers’ pricing decisions. We group these major factors into eight categories: organizational and marketing objectives, pricing objectives, costs, other marketing mix variables, channel members’ expectations, customers’ interpretation and response, competition, and legal and regulatory issues. Finally, we examine several issues associated with the pricing of products sold in business markets, focusing on price discounting, geographic pricing, and transfer pricing. OBJECTIVES: 1.Understand the role of price.
2.Identify the characteristics of price and nonprice competition.
3.Be familiar with demand curves and the price elasticity of demand.
4.Understand the relationships among demand, costs, and profits.
5.Describe key factors that may influence marketers’ pricing decisions.
6.Be familiar with the major issues that affect the pricing of products for business markets.
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Class Prep: Read Chapter 12 |
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