2. McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

3. One of the Most Difficult Decisions in Marketing $

4. Product Place Promotion Price.

6. Price must be a reflection of value Product Price

7. Price must be a reflection of value Product Price

8. Price must be a reflection of value Product Price

9. Price must be a reflection of value Product Price

10. Price must be a reflection of value Product Price

11. Price must be a reflection of value Product Price...

12. Value Value is the ratio of perceived benefits to price; or Value = (Perceived benefits divided by Price). 12-11

13. Value Value is the ratio of perceived benefits to price; or Value = (Perceived benefits divided by Price). 12-12 Benefits = a dollar and some change worth of value

14. Value Value is the ratio of perceived benefits to price; or Value = (Perceived benefits divided by Price). 12-13 Benefits = a dollar and some change worth of value = good value..

15. Value Value is the ratio of perceived benefits to price; or Value = (Perceived benefits divided by Price). 12-14. Product Price.

16. Value Value is the ratio of perceived benefits to price; or Value = (Perceived benefits divided by Price). 12-15. Product Price.

17. Value Value is the ratio of perceived benefits to price; or Value = (Perceived benefits divided by Price). 12-16. Product Price.

18. Price must be a reflection of value Product Price

19. Profit Equation Profit = Total Revenue- Total Cost. Value = what I perceive to be the worth of the product when I compare it to substitutes..

20. Profit Equation Profit = Total Revenue- Total Cost.20 per glass.30 per glass You will need to manually advance to the next slide.

21. Profit Equation Profit = (Unit Price × Quantity Sold) – (Fixed Cost – Variable Cost) You will need to manually advance to the next slide

22. Profit Equation Total Revenue x Quantity Sold Unit Price 70 glasses = $35 Profit = (Unit Price × Quantity Sold) – Fixed Cost – Variable Cost You will need to manually advance to the next slide.

23. Profit Equation Profit = (Unit Price × Quantity Sold) – Fixed Cost – Variable Cost.50 x 70 glasses = $35 Total Revenue Fixed cost = $5Variable cost =.20 per sale. You will need to manually advance to the next slide.

24. Profit Equation Profit = (Unit Price × Quantity Sold) – Fixed Cost – Variable Cost.50 x 70 glasses = $35 Total Revenue Fixed cost = $5Variable cost =.20 per sale You will need to manually advance to the next slide

25. Profit Equation Profit = (Unit Price × Quantity Sold) – Fixed Cost – Variable Cost.50 x 70 glasses = $35 Total Revenue Fixed cost = $5Variable cost = $14 You will need to manually advance to the next slide

26. Profit Equation Profit = (Unit Price × Quantity Sold) – Fixed Cost – Variable Cost Profit = (.50 x 70) – 5 - 14 You will need to manually advance to the next slide

27. Profit Equation Profit = (Unit Price × Quantity Sold) – Fixed Cost – Variable Cost Profit = 35 – 5 - 14 = 16 You will need to manually advance to the next slide

28. Profit Equation Profit = (Unit Price × Quantity Sold) – Fixed Cost – Variable Cost Profit = 35 – 5 - 14 = 16 Profit = (P × Q) – [FC + (UVC × Q)] Price Quantity Fixed Cost Unit variable cost Quantity (.50 X 70) [5 + (.20 X 70)] = 16 - You will need to manually advance to the next slide

29. General Pricing Approaches

30. End of Part One. Go to Part Two.