Identifying Pricing Constraints And Pricing Objectives

Front 1

Pricing Constraint

Back 1

Factors that limit the latitude of prices a firm may set

Front 2

Pricing Objectives

Back 2

Expectations that specify the role of price in an organization's marketing and strategic plans

Front 3

Demand for the Product Class, product, and brand

Back 3

The demand for each of the three category affecting the price a company can charge.

Luxury vs necessity. Urgency vs non urgent

Ex laptops to gaming to msi gs70 Alienware 13

Front 4

Newness of the product: stage in the product life cycle

Back 4

Newer a product and the earlier in its life cycle, the higher the price that can usually be charged.

Cycle = intro, growth, maturity, decline

Front 5

Single product vs product line

Back 5

Single product early in the product life cycle vs product line against many competitors and different price points

Front 6

Cost of producing and marketing the product

Back 6

Long run a firm must consider all costs in producing and marketing the product. If it doesn't cover costs then it will fail

Front 7

Cost of changing prices and time period they apply

Back 7

Setting prices regarding time frame and information available at that time. One can easily set prices on the go vs marketing strategy that makes it difficult to change prices such as printed catalogues.

Front 8

Type of competitive markets

Back 8

Prices are constrained to the type of market it competes in. Pure competition, monopolistic competition, oligopoly, pure monopoly. Aspects regarding price competition, product differentiation and advertising

Front 9

Competitors prices

Back 9

Know or anticipate present and future prices of competitors and potential competitors today and in the future.

Front 10

Break

Back 10

Break

Front 11

Profit

Back 11

Three different objectives which relate to profit. 1. Managing for long-run profits 2. Maximizing current profit objective (short term: quarter or annually) 3. Target return (a specification on ROI or ROA)

Front 12

Sales

Back 12

Hope that increase in sales will increase market share and profit. Can be easily managed for marketing managers over ROI

Front 13

Market share

Back 13

Firms pursue m.s. when industry sales are flat or declining

Front 14

Unit volume

Back 14

Quantity produced or sold. Matching capacity of the firms production to sales. Counter productive if increase in unit volume is due to price cutting which drives firms profitability

Front 15

Survival

Back 15

Throwing out the above to be viable in the long run

Front 16

Social responsibility

Back 16

Forgo higher profit and recognize obligation to customer and society in general. Medtronics heart pacemaker