1. Chapter 25 price planning Section 25.1 Price Planning Issues
Price Planning Factors

2. Price Planning Issues
Section 25.1
What Is Price?

3. Price Planning Issues Goals of Pricing Earning a Profit
Section 25.1
Goals of Pricing
Earning a Profit
Gaining Market Share
Meeting the Competition
Return on Investment (ROI)
Market Position
Nonprice Competing Factors
return on investment (ROI)
A financial calculation that is used to determine the relative profitability of a product
market share
A company’s percentage of the total sales volume generated by all companies that compete in a given market.
market position
The relative standing a competitor has in a given market in comparison to its other competitors.

4. Price Planning Factors
Section 25.2
Market Factors Affecting Price
Costs and Expenses
Supply and Demand
Consumer
Perceptions
Competition
Responses to Increasing Costs and Expenses
Demand Elasticity
Quality Equals Price
Nonprice Competition Minimizes Price as a Reason for Purchasing
Responses to Lower Costs Costs and Expenses
Law of Diminishing Marginal Utility
Service Adds to Perception About Price
Break-Even Point
Inelastic Demand
Battles to Attract Customers Can Result in Price Wars
Factors Influencing Demand Elasticity:
Brand Loyalty
Price Relative to Income
Availability of Substitutes
Luxury Versus Necessity
Urgency of Purchase

5. Price Planning Factors
Section 25.2
Market Factors Affecting Price
Label the Demand Curve, Supply Curve, and the Equilibrium Point

6. Price Planning Factors
Section 25.2
Legal and Ethical Considerations for Pricing
FTC Guidelines for Advertising Prices

7. Chapter 26 pricing strategies Section 26.1 Basic Pricing Strategies
Pricing Process Strategies

8. Basic Pricing Policies
Section 26.1
Basic Pricing Concepts
Three Strategies Used for Setting Base Prices
Demand-Oriented Pricing
Competition-Oriented Pricing
Cost-Oriented Pricing
Attempt to determine what consumers are willing to pay
Price above the competition
Resellers calculate prices using the concept of markup
Price below the competition
Relies on premises of supply-and-demand theory and demand elasticity factors
Used by wholesalers and retailers
Price in line with the competition
markup
The difference between an item’s cost and sale price.

9. Basic Pricing Policies
Section 26.1
Basic Pricing Concepts

10. Basic Pricing Policies
Section 26.1
Basic Pricing Concepts

11. Basic Pricing Policies
Section 26.1
Pricing Policies and Product Life Cycle
Product Life Cycle
The goal of marketers is to keep products in this stage as long as possible.
Price is reduced or product is revised.
Maturity
Growth
Price is reduced. Manufacturing costs are reduced. Product may be discontinued.
Decline
Introduction
Time

12. Pricing Process Strategies
Section 26.2
Adjusting the Base Price
The segmented pricing strategy helps businesses optimize profits and compete effectively.
segmented pricing strategy
A strategy that uses two or more different prices for a product, though there is no difference in the item’s cost.

13. Pricing Process Strategies
Section 26.2
Adjusting the Base Price
Four Segmented Pricing Strategy Factors

14. Chapter 27 pricing math Section 27.1 Calculating Prices Section 27.2
Calculating Discounts

15. Calculations for Lowering Prices
Calculating Prices
Section 27.1
Calculations for Lowering Prices
Lowering Prices

16. Calculating Discounts
Section 27.2
Discounts
How to Calculate a Discount in Dollars Along with an Item’s Net Price

17. Calculating Discounts
Section 27.2
Discounts
Employee discounts can range from 10 percent to 30 percent for entry-level employees.
employee discount
A discount offered to workers by their employers.

18. Calculating Discounts
Section 27.2
Discounts
Quantity Discounts
No. of items 1–24 25–48 49–72
Unit Price $0.95 $0.90 $0.85

19. Calculating Discounts
Section 27.2
Discounts
Potential Pitfalls of Discount Pricing
Frequent sales can numb customer response.
Some businesses have to offer very deep discounts to see an increase in traffic.
Price promotions may set a precedent.
Poorly planned discounts can lead to price wars.