1. Selected Topics from Chapters 18 and 19 Consumer Behavior and Pricing/Channel Strategy

2. Price Typical definition, the dollar amount the consumer pays. In reality, it includes other costs besides monetary costs such as time, cognitive effort, and behavioral effort. Typically, you trade-off one for another.

3. The Pivotal Role of Price in Marketing Exchanges Consumer costsBusiness costs Money Time Cognitive activity Behavior effort Price willing to sell + Profit = + Value = Price willing to pay Production Promotion Distribution Marketing research Market exchange

4. Triggering the Exchange Trade-off in the consumers costs: –time for money (long queue but less $$$) –money for time (short queue but more $$$) –money for effort (get lawn mowed for $$$) –effort for money (make your own pizza) –effort for value (shop around spending all weekend) –value for effort (buy the first car you see). Results in different market segments.

5. Other Issues In some cases, people like the idea of spending their energies shopping. One way of reducing cognitive effort (which increases when there is too much information/too many choices) is by using heuristics. Internet/e-commerce reduces behavioral effort.

6. Channel Utilities Form Utility: Convert raw/bulk goods to a consumable product/quantity. Place Utility: Making the physical exchange possible where the consumer wants it... Time Utility:...at a time when the consumer wants it. Possession: Actual transfer of ownership.