1. MERCADEO
Capitulo 19: Conceptos de Precios
Escrito por: Amit Shah, Frostburg State University
Diseñado por: Eric Brengle, B-books, Ltd.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
1
2. Resultado del Aprendizaje
RA1
RA2
RA3
Discuta la importancia de las decisiones de
fijación de precios para la economía y la
empresa individual
Enumerar y explicar una serie de objetivos de
precios
Explicar el papel de la demanda en la
determinación de precios
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
2
3. Resultado del Aprendizaje
RA4
RA5
RA6
Comprender el concepto de sistemas de gestión del
rendimiento
Describir las estrategias de los precios basadas en
costos
Demostrar cómo las estrategias del ciclo de vida del
producto, competencia, distribución y promoción,
coincidencia de precios de garantía, las demandas de
los clientes, el Internet, y la percepción de la calidad
puede afectar el precio
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
3
4. La impor tancia de los precios
RA1
Discuta la importancia de las
decisiones de fijación de precios
para la economía y la empresa
individual.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
4
5. La importancia de los precios
Para el vendedor...
Para el vendedor...
El precio son sus
El precio son sus
ingresos
ingresos
Para el consumidor...
Para el consumidor...
El precio es el costo
El precio es el costo
De algo
De algo
El precio asigna los recursos
El precio asigna los recursos
en una economía de libre
en una economía de libre
mercado
mercado
5
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
6. Cual es el precio?
El precio es lo que se da
en un canje para adquirir un bien
o servicio.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
6
7. La importancia del precio para Directores de
Mercadeo
Ingresos - El precio que se cobra a
los clientes, multiplicado por el
número de unidades vendidas.
Ganancias - diferencia entre ingresos
y gastos
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
7
8. Tendencias que influyen en los precios
Inundación de nuevos productos
Inundación de nuevos productos
Mayor disponibilidad de precio de ganga marcas
Mayor disponibilidad de precio de ganga marcas
privadas y genéricas
privadas y genéricas
Precio de Corte como una estrategia para mantener
Precio de Corte como una estrategia para mantener
o recuperar la cuota de mercado
o recuperar la cuota de mercado
Internet utilizado para la comparación de compras
Internet utilizado para la comparación de compras
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
8
9. RA1
Resultado del Aprendizaje
La importancia de las decisiones de los precios
Precios por unidades de Ventas = Ingresos
Ingresos – Gastos = Ganancias
Impulsa el crecimiento de beneficio, los aumentos salariales
y la inversión corporativa
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
9
10. Objetivos de los Precios
RA2
Enumerar y explicar una serie de
objetivos de precios
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
10
11. Objetivo de los precios
Con animo de Lucro
Ventas orientadas
Estatus
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
11
12. Objetivo de los precios con animo de
lucro
Objetivo de los precios con
animo de lucro
Beneficio de
Beneficio de
Maximización
Maximización
Beneficios
Beneficios
Satisfactorios
Satisfactorios
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Objetivo de la
Objetivo de la
Rentabilidad de
Rentabilidad de
La inversion
La inversion
12
13. Maximización del Beneficio
La fijación de precios por lo
que el ingreso total es tan grande
como es posible en relación con
los costos totales.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
13
14. Retorno de la Inversión
Beneficio neto después de
impuestos dividido por el total
de activos.
ROI = Beneficio neto después
de impuestos
El total de activos
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
14
15. Las ventas orientadas a los objetivos de
fijación de precios
Las ventas orientadas a los objetivos
de fijación de precios
Cuota del
Cuota del
mercado
mercado
Maximización
Maximización
De ventas
De ventas
http://www.target.com
http://www.walmart.com
http://www.jcpenney.com
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Online
15
16. Cuota del Mercado
Una empresa de venta de
productos como porcentaje
de las ventas totales de ese sector.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
16
17. Maximización de Ventas
• A corto plazo, el objetivo de
maximizar las ventas
• No tiene en cuenta las ganancias, la
competencia y el entorno del
marketing
• Puede ser utilizado para vender el
exceso de inventario
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
17
18. Estatus Quo Objetivos de Precios
Estatus Quo Objetivos de Precios
Mantener los
Mantener los
Precios existentes
Precios existentes
Conozca los
Conozca los
Precios de la
Precios de la
competencia
competencia
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
18
19. Resultado del Aprendizaje
RA2
Objetivos de los precios
Con animo de lucro
Maximización
Del beneficio
Beneficio
satisfactorio
Objetivo
ROI
Ventas orientadas
Cuota del
mercado
Maximizacion
De ventas
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Estatus Quo
Mantener los
precios
19
20. El determinante del precio es la demanda
RA3
Explicar el papel de la demanda en
la determinación de precios.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
20
21. El determinante del precio en la demanda
Demanda - La cantidad de un producto que
se vende en el mercado a diferentes precios para
un período especificado.
Suministrar - La cantidad de
un producto que se ofrecerá en el mercado
por un proveedor a varios precios
durante un período determinado
http://www.ubid.com
Online
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
21
22. La curva de la demanda
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
23. La curva de oferta
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
24. Cómo establecer la demanda y la oferta de
precios
El equilibrio de precios - El precio
al que la demanda y la oferta son
iguales.
Elasticidad de la demanda –
la capacidad de respuesta de los
consumidores o la sensibilidad a los
cambios de precio.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
24
26. Elasticidad de la demanda
Elasticidad de
Elasticidad de
La demanda
La demanda
Demanda
Demanda
Inelástica
Inelástica
Demanda
Demanda
Unitaria
Unitaria
Los consumidores compran más o
menos un producto cuando el
precio cambia
Un aumento o disminución del
precio no afectará
significativamente a la demanda
Un aumento en las ventas
compensa exactamente una
disminución de los precios y los
ingresos no se modifican
26
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
27. Elasticidad de la demanda
Elasticidad (E)
Cambio porcentual en la cantidad
=
demandada del bien A
Variación porcentual del precio del bien A
Si E es mayor que 1, la demanda es elástica.
Si E es menor que 1, la demanda es inelástica.
Si E es igual a 1, la demanda es unitaria.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
27
28. Elasticidad de la Demanda
Los Precios van.. Los Ingresos van..La demanda es…
Los Precios van.. Los Ingresos van..
Bajo
Alto
Elástico
Bajo
Bajo
Inelástico
Alto
Alto
Inelástico
Alto
Bajo
Elástico
Alto y bajo
Sigue siendo el
mismo
Elasticidad
Unitaria
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
28
29. Elasticidad de la demanda
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
30. Factores que afectan la elasticidad de la
demanda
Disponibilidad de sustitutos
Disponibilidad de sustitutos
Precio relativo al poder
Precio relativo al poder
adquisitivo
adquisitivo
Durabilidad del producto
Durabilidad del producto
Otros usos de un producto
Otros usos de un producto
Tasa de Inflacion
Tasa de Inflacion
http://www.columbiahouse.com
Online
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
30
31. Creación de la potencia en el precio
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
32. RA3
Resultado del Aprendizaje
El rol de la demanda y la determinación de precios
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
32
33. El poder de los sistemas de gestión del
rendimiento
RA4
Comprender el concepto de sistemas
de gestión del rendimiento
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
33
34. Sistemas de Gestión de Rendimiento
Una técnica de ajuste de precios
que utiliza el software
matemático complejo para llenar
la capacidad no utilizada.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
34
35. Sistema de Gestión de Rendimiento
Descontando las compras tempranas
Descontando las compras tempranas
Limitación de las primeras ventas a
Limitación de las primeras ventas a
precios reducidos
precios reducidos
El exceso de capacidad de reserva
El exceso de capacidad de reserva
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
35
36. Sistema de gestión de rendimiento
• Las propiedades en alquiler terratenientes utilizan
sistemas de gestión del rendimiento para aumentar
el alquiler a un ritmo más rápido.
• La "M / PF-Star Optimizador de Rendimiento
Precio" es similar a los sistemas de valoración
utilizados por las compañías aéreas y empresas de
alquiler de coches.
• Utiliza datos como el número de vacantes y las
condiciones del mercado previsto para determinar
la renta óptima.
• Los inquilinos también pueden tomar ventaja de la
tecnología.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
36
38. El determinante costo del precio
RA5
Describir las estrategias de los
Precios, basada en los costos
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
38
39. El determinante Costo de Precio
Tipos de Costos
Tipos de Costos
Costos
Costos
Variables
Variables
Costos
Costos
Arreglados
Arreglados
Varía con los cambios
Varía con los cambios
en el nivel de salida
en el nivel de salida
No cambia como el
No cambia como el
nivel de salida que si
nivel de salida que si
cambia
cambia
39
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
40. El determinante costo de precio
Marcado de precios
Marcado de precios
claves
claves
Métodos
utilizados para
Beneficio de los precios
fijar los preciosBeneficio de los precios
De maximización
De maximización
Precios de equilibrio
Precios de equilibrio
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
40
41. Marcado de Precios
Marcado de Precios - El costo
de comprar el producto más las cantidades para
gastos de lucro que no estén contabilizados.
La deformación trapezoidal - La práctica
de marcar los precios en un 100%,
o duplicar el costo.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
41
42. Maximización del Beneficio
Maximización del Beneficio– El método
de fijación de precios que se produce
cuando el ingreso marginal es igual al
costo marginal.
Ingreso Marginal -Los ingresos adicionales
asociados con la venta de una unidad
adicional de producto, o el cambio en el
ingreso total, con un cambio de una
unidad en la producción.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
42
44. Precios de Equilibrio
Cantidad de
equilibrio
=
Contribución de
=
Costos fijos
Total de costos fijos
Contribución de costo fijo
Precio - Promedio de costo
Variable
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
44
46. Otros determinantes del precio
RA6
Demostrar cómo las estrategias
del ciclo de vida del producto,
competencia, distribución y promoción,
coincidencia de precios de garantía,
las demandas de los clientes,
el Internet, y la percepción de la
calidad puede afectar el precio.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
46
47. Otros determinantes del Precio
Etapas del Ciclo de Vida
Etapas del Ciclo de Vida
del Producto
del Producto
Competencia
Competencia
Estrategia de distribución
Estrategia de distribución
Estrategia de promoción
Estrategia de promoción
Calidad Percibida
Calidad Percibida
47
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
48. Fases del Ciclo de Vida del Producto
Etapa
Preliminar
$
Alto
Etapa de
Crecimiento
$
Estable
Etapa de
Madurez
$
Decreciente
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Etapa de
decline
$
Decreciente
Estable
Alto
48
49. La Competencia
• Los altos precios puede inducir a las
empresas a entrar en el mercado.
• La competencia puede conducir a la
guerra de precios.
• La competencia global puede obligar a las
empresas a bajar los precios
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
49
50. Estrategia de Distribución
Fabricantes
Fabricantes
•
•
•
•
•
Ofrecer un mayor margen de
ganancia o concesión
comercial
El uso exclusivo de
distribución
Franquicias
Evite negocios con
descuento que rebajan los
precios
Desarrollar la lealtad de
marca
Mayoristas y minoristas
Mayoristas y minoristas
Vender en contra de la
marca
Comprar productos del
mercado gris
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
50
51. Estrategia de Distribución
Venta Contra la media de Brandconocidos productos de marca a
precios elevados con el fin de vender
las marcas de distribuidor a precios
reducidos.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
51
52. El impacto del internet
Selección de productos
Selección de productos
Las segundas opiniones de los sitios expertos
Las segundas opiniones de los sitios expertos
Costos de compras
Costos de compras
Subastas por Internet
Subastas por Internet
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
52
53. Estrategias de promoción/ garantías
de precios
Estrategias de Promoción
•
Precio utilizado como herramienta de promoción
•
Los precios también puede ser una herramienta para
las promociones comerciales.
Garantías de precios
•
Coincidirá con el precio de cualquier competidor
•
Señala al mercado objetivo que se posiciona como un
proveedor de bajo precio
53
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
54. La relación del precio con la cantidad
Precios Prestigio - Carga un
alto precio para ayudar a promover una
imagen de alta calidad
http://www.vivre.com
http://www.ashford.com
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Online
54
55. Dimensiones de la Calidad
1. Fácil de Usar
2. Versatilidad
3. Durabilidad
4. Servicial
5. Rendimiento
6. Prestigio
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
55
Notes:
Price means one thing to the consumer and another to the seller. To the consumer, the price is the cost of something; to the seller, price is the source of profits. Marketing mangers find the task of setting prices a challenge.
Notes:
Price is typically money exchanged for a good or service; however, it may also be time lost while waiting to acquire the good or service.
Consumers are interested in obtaining a “reasonable price,” which means a perceived reasonable value at the time of the transaction. The price paid is based on the satisfaction consumers expect to receive from a product and not necessarily the satisfaction they actually receive.
Price can relate to anything with perceived value, not just money. When goods or services are exchanged, the trade is called barter.
Notes:
Prices are the key to revenues, which are the key to profits for an organization.
Revenue is what pays for every activity of the company. What’s left over is profit. The price is set to earn a profit for the company.
Managers strive to charge a price that will earn a fair profit. The price must not be too high or too low, and must equal a perceived value to consumers.
Lost sales mean lost revenue; on the other hand, if a price is too low, the company loses revenue. Additionally, setting prices too low may not attract as many buyers as managers might think.
Notes:
Setting the right price can be a stressful task of marketing managers, as demonstrated by the above trends in the consumer market.
Consumers are using the Internet to make wiser and more informed purchasing decisions.
Competition in general is increasing, and consequently many installations, accessories, and parts are being marketed like indistinguishable commodities.
Notes:
Pricing objectives must be specific, attainable, and measurable to survive in today’s competitive market.
Pricing objectives can be divided into three categories as shown above and described in the following slides.
Notes:
Profit-oriented pricing objectives include profit maximization, satisfactory profits, and target return on investment. A discussion of each of these follows.
Notes:
Although profit maximization aims at setting prices for a large total revenue, it does not always signify unreasonably high prices. Both price and profits depend on the competitive environment and the product’s perceived value. Remember, too, that a firm cannot charge a price higher than the product’s perceived value.
Satisfactory profits represent a reasonable level of profits that is consistent with the level of risk an organization faces.
Notes:
The most common profit objective is a target ROI, or the return on total assets. It represents a firm’s effectiveness in generating profits with the available assets. The higher the firm’s ROI, the better off the firm is. ROI puts a firm’s profits into perspective by showing profits relative to investment.
ROI needs to be evaluated in terms of the competitive environment, risks in the industry, and economic conditions. In general, firms seek ROIs in the 10 to 30 percent range, depending on the industry. For example GE seeks a 25 percent ROI, while grocery chains obtain a return under 5 percent.
Online Activity:
Target, Wal-Mart, and JC Penney
Shop for some kind of electronic device (DVD player, digital camera, MP3 player, etc.) on the Target, Wal-Mart, and JCPenney Web sites. How do the prices for the same product compare at the three retailers? Do they all even carry the same product? Compare the price on the Web with the price offered at the physical store and explain any discrepancies.
Notes:
Market share can be reported in dollars or units of product, and the results may be different.
Many companies believe that maintaining or increasing market share is an indicator of the effectiveness of their marketing mix. Larger shares often mean higher profits, thanks to economies of scale, market power, and ability to compensate top-quality management. However, this conventional wisdom is not always reliable.
Many companies with low market share survive if they are in a slow growth industry and experience few product changes.
Notes:
Maximization of cash should never be a long-run objective because cash maximization may mean little or no profitability. Without profits, a company cannot survive.
Notes:
Status quo pricing seeks to maintain existing prices or to meet the competition’s prices.
This category requires little planning, and is essentially a passive policy.
Notes:
After pricing goals are established, specific prices are set.
The price set for products depend on two factors: the demand for the good and the cost to the seller for that good.
Online Activity:
uBid
See how demand and supply establish prices by checking out the offerings at uBid.com. See a variety of products and identify the price and the number of items in the lot. Can you see a correlation between the price and the number of, say, printers uBid has on hand?
Notes:
The quantity of a product that people will buy depends on its price. The higher the price, the fewer goods or services consumers will demand, and vice versa.
Notes:
Exhibit 19.3 demonstrates the supply curve. At higher prices, manufacturers will obtain more resources and produce more product to sell.
Notes:
The concepts of supply and demand are combined to see how competitive market prices are determined.
Notes:
Exhibit 19.4 illustrates the equilibrium price for Fruit Smoothies.
An equilibrium price is reached when supply and demand are equal.
A price below equilibrium results in a shortage because the demand is greater than the available supply. A shortage puts upward pressure on price.
At a price above equilibrium, the demand is less than the available supply, and a surplus is created. A surplus lowers the price.
Establishing an equilibrium price may not be possible all at once. Prices may fluctuate as the market for a good moves toward equilibrium; however, demand and supply will settle into the proper balance.
Notes:
To appreciate demand analysis, the concept of elasticity should be understood.
Discussion/Team Activity:
Identify products and/or services which illustrate the elasticity of demand.
Notes:
Exhibit 19.6(a) shows a very elastic demand curve. Decreasing the price of the good increases sales and revenue substantially.
Online Activity
Columbia House
How can Columbia House offer so many CDs, videos, or DVDs for less than a dollar? Go to the Web site to see what kind of deals Columbia House is offering right now. Compare the introductory offers to the pricing for subsequent purchases. What conclusions can you draw about Columbia House and about the elasticity of demand for CDs based on the posted pricing for the initial sign-up and for subsequent purchases?
Notes:
Factors that affect elasticity of demand are:
Availability of substitutes: When many substitutes are available, it is easy to switch products, making demand elastic. The same is true in reverse, if no substitutes are available.
Price relative to purchasing power: If a price is so low that it is an inconsequential part of an individual’s budget, demand will be inelastic and people are not sensitive to the price increase.
Product durability: Repairing durable products rather than replacing them prolongs their useful life. If the cost of a new product increases, people might elect to repair the old product. Thus, people are sensitive to the price increase, and the demand is elastic.
A product’s other uses: The greater the number of uses for a product, the more elastic demand tends to be. If a product has only one use, the quantity purchased probably will not vary as price varies.
Discussion/Team Activity:
Discuss examples of price inelasticity and elasticity. Include zero percent automobile financing, the price of vehicle models, cell phone rates, prestige watches, cigarettes, health care, etc.
Notes:
When competitive pressures are high, a company must know when it can raise prices to maximize its revenues.
Yield management systems, which were first developed by the airline industry, utilize complex mathematical software to profitably fill unused capacity.
Yield management systems have spread beyond the service industries, and used by companies to set prices based on a number of variables.
Notes:
The YMS software used by airlines employs techniques such as discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity.
SOURCES: Jerry Ascierto, "Special Focus: Technology And The Bottom Line," Apartment Finance Today • May 2008;
Kemba J.Dunham, “Technology Proves a Boon for Some Landlords,” Wall Street Journal, June 28, 2006, B10.
Notes:
Sometimes the importance of demand is ignored when prices are decided, based largely or solely on the basis of costs.
Prices set on the basis of cost may be too high for the target market. On the other hand, if prices are set too low, the firm will earn a lower return than it should.
Costs should be determined as part of any price determination, in part to determine the floor below which a good or service must not be priced in the long run.
4. Variable and fixed costs are important aspects of price determination.
Notes:
Costs can be used to set prices in a variety of ways. Markup pricing is fairly simple. The others—profit maximization pricing and break-even pricing--use more complicated concepts of costs. A description of these methods is shown on the following slides.
Notes:
Markup pricing is the most popular method to establish a selling price. Instead of using the costs of production to set price, it uses the costs of buying the product from the producer, plus amounts for profit and expenses. The total determines the selling price.
Keystoning is a method based on experience, with many small retailers doubling the cost. Other factors that influence markups are the merchandise’s appeal to customers, past response to the markup, the item’s promotional value, the seasonality of the goods, their fashion appeal, the product’s traditional selling price, and competition.
Notes:
Profit maximization occurs when marginal revenue equals marginal cost.
Marginal cost is the change in total costs associated with a one-unit change in output. Marginal revenue is the extra revenue associated with selling an extra unit of output. As long as the revenue of the last unit produced and sold is greater than the cost of the last unit produced and sold, the firm should continue manufacturing and selling the product.
Notes:
Break-even analysis determines what sales volume must be reached before the company breaks even and no profits are earned. (Its total costs equal total revenue.) – Exhibit 19.10
Notes:
Break-even analysis provides a quick estimate of how much the firm must sell to break even and how much profit can be earned if a higher sales volume is obtained. It is useful to see what can be done to reduce costs or increase sales. However, it has limitations such as the difficulty in determining whether a cost is fixed or variable. Additionally, break-even analysis ignores demand.
Notes:
Other factors besides demand and costs can influence price. A description of these determinants follows.
Notes:
As a product moves through its life cycle, the demand for the product and the competitive conditions change:
During the introductory stage, prices are set high to recover development costs. Demand originates in the core of the market and is relatively inelastic.
As the product enters the growth stage, prices tend to stabilize due to the increased product supply as new competitors enter the market. Second, the product begins to appeal to a broader market, often lower income groups. Last, economies of scale are lowering costs, and the savings can be passed on to the consumer.
Maturity brings about further decreases in price, as competition increases and high-cost firms are eliminated. However, distribution channels become a significant cost factor because of the need to offer wide product lines. Usually, only the most efficient manufacturers remain.
The decline stage may see further price decreases until only one firm is left in the market. At that time, prices begin to stabilize and may even increase as the product moves into the specialty goods category.
Discussion/Team Activity:
Identify and discuss products in various stages of the product life cycle. Relate the pricing of these products to the product life cycle shown above.
Notes:
Competition varies during the product life cycle. Although a firm may not have competition at first, the high prices obtained may induce other firms to enter the market.
Sometimes competition can lead to price wars.
Notes:
Adequate distribution for a new product can be obtained by offering a larger-than-usual profit margin to distributors, or by offering a large trade allowance to defray the costs of promotion.
However, some distributors use “selling against the brand” strategies to promote their own private-label brands. They place well-known brands at high prices while offering store brands at lower prices.
Distributors may also go outside traditional channels and buy “gray-market goods” at lower prices so they can sell the goods with a large markup or at a reduced price.
Notes:
The Internet connects sellers and buyers quickly, and allows product and price comparison, putting them in a better bargaining position.
Numerous Web sites provide information regarding product selection, and a second opinion for brand selection. However, quality of reviews vary.
Shopping bots search the Web for the best price. The two types of shopping bots are broad-based types and niche-oriented types. Most shopping bots give preferential listings to e-retailers who pay for the privilege, and not necessarily the lowest-priced retailer.
Internet auctions, such as eBay, are huge. Business-to-business auctions are likely to be the dominant form in the future.
Online Activity
Vivre and Ashford
Vivre is a luxury lifestyle catalog and Web site. Visit Vivre.com and review the product offerings. Pick a product and then see if you can get it cheaper at Ashford.com, a luxury brand discounter. What luxury brands are offered on both sites? How do the prices compare? Can you identify tiers of luxury brands?
Notes:
When a purchase decision involves uncertainty, consumers tend to rely on a high price as a predictor of good quality. Consumers assume that “you get what you pay for.”
Prestige pricing takes these consumer attitudes into account when devising price strategies. A successful prestige pricing strategy requires a retail price that is reasonably consistent with consumers’ expectations.
Notes:
In a recent study to ascertain the dimensions of quality revealed the factors shown on this slide, in order of importance, beginning with ease of use.
When consumers focused on prestige and/or durability to assess quality, price was a strong indicator of perceived quality. Price was less important as an indicator of quality if the consumer was focused on the other four dimensions of quality.
