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ChapterTenPricing:UnderstandingandCapturingCustomerValue
Pricing:
Understandingand
CapturingCustomerValueWhatIsaPrice?MajorPricingStrategiesOtherInternalandExternalConsiderationsAffectingPriceDecisionsTopicOutline
Priceistheamountofmoneychargedforaproductorservice.Itisthesumofallthevaluesthatconsumersgiveupinordertogainthebenefitsofhavingorusingaproductorservice.WhatIsaPrice?
Priceistheonlyelementinthemarketingmixthatproducesrevenue;allotherelementsrepresentcostsWhatIsaPrice?
MajorPricingStrategiesUnderstandinghowmuchvalueconsumersplaceonthebenefitstheyreceivefromtheproductandsettingapricethatcapturesthatvalueCustomerValue-BasedPricing
MajorPricingStrategiesCustomerValue-BasedPricing
MajorPricingStrategiesValue-basedpricingusesthebuyers’perceptionsofvalue,notthesellerscost,asthekeytopricing.Priceisconsideredbeforethemarketingprogramisset.Value-basedpricingiscustomerdrivenCost-basedpricingisproductdrivenCustomerValue-BasedPricing
MajorPricingStrategiesCustomerValue-BasedPricing
MajorPricingStrategiesGood-valuepricingofferstherightcombinationofqualityandgoodserviceatafairpriceCustomerValue-BasedPricing
MajorPricingStrategiesEverydaylowpricing(EDLP)chargingaconstanteverydaylowpricewithfewornotemporarypricediscountsCustomerValue-BasedPricing
MajorPricingStrategiesHigh-lowpricingcharginghigherpricesonaneverydaybasisbutrunningfrequentpromotionstolowerpricestemporarilyonselecteditemsCustomerValue-BasedPricing
MajorPricingStrategiesValue-addedpricingattachesvalue-addedfeaturesandservicestodifferentiateoffers,supporthigherprices,andbuildpricingpowerCustomerValue-BasedPricing
MajorPricingStrategiesCost-basedpricingsettingpricesbasedonthecostsforproducing,distributing,andsellingtheproductplusafairrateofreturnforeffortandr
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