1. Intro to Marketing Mr. Bernstein Pricing Strategy, pp 526-581 November 19-20, 2014

2. Factors Affecting Price (pp 526-536) Costs – Fixed or Variable Supply and Demand Consumer Perceptions Competition What are your objectives? Return on Investment Gaining Market Share Cash Flow / Survival Legal / Ethical Issues 2 Intro to Marketing Mr. Bernstein

3. Pricing Strategy Approaches (pp 544-551) Cost-Based Pricing Cost plus markup Demand-Based Pricing “What the market will bear” Competition-Based Pricing “Price Takers” Flexible or One-Price Policy What causes pricing strategy to change over time? 3 Intro to Marketing Mr. Bernstein

4. Pricing Techniques (pp 552-559) Psychological pricing: Prestige pricing Odd/even pricing Price lining Promotional pricing Multiple Unit discounts Bundle pricing 4 Intro to Marketing Mr. Bernstein

5. How often should pricing be revised? Elastic demand – revise often Do you compete primarily on price, service or quality? 5 Intro to Marketing Mr. Bernstein

6. Analyzing Pricing (pp 566-581) Break-even Analysis: Number of units that must be sold to cover fixed costs Fixed Costs / (Unit Selling Price – Variable Costs) = Break-Even Point 6 Intro to Marketing Mr. Bernstein

7. Analyzing Pricing Markup: Amount added to the cost of an item Cost + Markup = Price Markup / Cost = Percentage Markup AKA “Gross Margin”; doesn’t include overhead costs 7 Intro to Marketing Mr. Bernstein