1. Lecture on Building the Price Foundation

2. NATURE AND IMPORTANCE OF PRICE
What is a Price?
Barter

3. The price of four different purchases

4. Lamborghini
What will this car cost?

5. NATURE AND IMPORTANCE OF PRICE
Price as an Indicator of Value
Value-pricing
Price in the Marketing Mix
Profit Equation

6. Steps in setting price

7. STEP 1: IDENTIFY PRICING CONSTRAINTS AND OBJECTIVES
Identifying Pricing Constraints
Demand for the Product Class, Product, and Brand
Newness of the Product: Stage in the Product Life Cycle
Single Product versus a Product Line
Cost of Producing and Marketing the Product

8. STEP 1: IDENTIFY PRICING CONSTRAINTS AND OBJECTIVES
Identifying Pricing Constraints
Cost of Changing Prices and Time Period They Apply
Types of Competitive Markets
Pure monopoly
Oligopoly
Monopolistic competition
Pure competition

9. Pricing, product, and advertising strategies available to firms in four types of competitive markets

10. STEP 1: IDENTIFY PRICING CONSTRAINTS AND OBJECTIVES
Identifying Pricing Constraints
Competitors’ Prices

11. STEP 1: IDENTIFY PRICING CONSTRAINTS AND OBJECTIVES
Identifying Pricing Objectives
Profit

12. Where each dollar of your movie ticket goes

13. STEP 1: IDENTIFY PRICING CONSTRAINTS AND OBJECTIVES
Identifying Pricing Objectives
Sales
Market Share
Unit Volume
Survival
Social Responsibility

14. STEP 2: ESTIMATE DEMAND AND SERVICE
Fundamentals of Estimating Demand
The Demand Curve

15. Illustrative demand curves for Newsweek magazine

16. STEP 2: ESTIMATE DEMAND AND SERVICE
The Demand Curve
Demand factors
Movement Along versus Shift of a Demand Curve

17. STEP 2: ESTIMATE DEMAND AND SERVICE
Fundamentals of Estimating Revenue
Total revenue
Average revenue
Marginal revenue

18. Fundamental revenue concepts

19. How a downward-sloping demand curve affects total, average, and marginal revenue

20. STEP 2: ESTIMATE DEMAND AND SERVICE
Fundamentals of Estimating Revenue
Price Elasticity of Demand
Price Elasticity for Brands and Product Classes

21. STEP 3: DETERMINE COST, VOLUME, AND PROFIT RELATIONSHIPS
The Importance of Controlling Costs
Total cost
Fixed cost
Variable cost
Marginal cost

22. Fundamental cost concepts

23. STEP 3: DETERMINE COST, VOLUME, AND PROFIT RELATIONSHIPS
Marginal Analysis and Profit Maximization

24. Profit maximization pricing

25. STEP 3: DETERMINE COST, VOLUME, AND PROFIT RELATIONSHIPS
Break-Even Analysis
Break-even point
Break-even chart
Calculating a Break-Even Point

26. Calculating a break-even point

27. Break-even analysis chart