Chapter 14 - Arriving at the final price. This chapter describe how to establish the “approximate price level” using demand-oriented, cost-oriented, profit-oriented, and competition-oriented approaches; recognize the major factors considered in deriving a final list or quoted price from the approximate price level; identify the adjustments made to the approximate price level on the basis of discounts, allowances, and geography. | McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. LO1 Describe how to establish the “approximate price level” using demand-oriented, cost-oriented, profit-oriented, and competition-oriented approaches. Recognize the major factors considered in deriving a final list or quoted price from the approximate price level. LO2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 14, YOU SHOULD BE ABLE TO: LO3 Identify the adjustments made to the approximate price level on the basis of discounts, allowances, and geography. Name the principal laws and regulations affecting specific pricing practices. LO4 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 14, YOU SHOULD BE ABLE TO: VIZIO, INC.—WHERE VISION MEETS VALUE™ IN HDTV FIGURE 14-1 The six steps in setting price. The first three steps were covered in Chapter 13 and the last three steps in Chapter 14. FIGURE 14-2 Four approaches for selecting an approximate price level STEP 4: SELECT | McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. LO1 Describe how to establish the “approximate price level” using demand-oriented, cost-oriented, profit-oriented, and competition-oriented approaches. Recognize the major factors considered in deriving a final list or quoted price from the approximate price level. LO2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 14, YOU SHOULD BE ABLE TO: LO3 Identify the adjustments made to the approximate price level on the basis of discounts, allowances, and geography. Name the principal laws and regulations affecting specific pricing practices. LO4 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 14, YOU SHOULD BE ABLE TO: VIZIO, INC.—WHERE VISION MEETS VALUE™ IN HDTV FIGURE 14-1 The six steps in setting price. The first three steps were covered in Chapter 13 and the last three steps in Chapter 14. FIGURE 14-2 Four approaches for selecting an approximate price level STEP 4: SELECT AN APPROXIMATE PRICE LEVEL DEMAND-ORIENTED PRICING APPROACHES LO1 Skimming Pricing Penetration Pricing Prestige Pricing Price Lining Rolex Ad MARKETING MATTERS Energizer’s Lesson in Price Perception— Value Lies in the Eye of the Beholder LO1 FIGURE 14-3 Demand curves for two demand-oriented pricing approaches STEP 4: SELECT AN APPROXIMATE PRICE LEVEL DEMAND-ORIENTED PRICING APPROACHES Bundle Pricing Yield Management Pricing Odd-Even Pricing Target Pricing LO1 STEP 4: SELECT AN APPROXIMATE PRICE LEVEL COST-ORIENTED PRICING APPROACHES Standard Markup Pricing Cost-Plus Pricing Experience Curve Pricing Cost-Plus Percentage- of-Cost Pricing Cost-Plus Fixed-Fee Pricing LO1 FIGURE 14-A Markups for a manufacturer, wholesaler, and retailer on a home appliance sold to consumers for $100 STEP 4: SELECT AN APPROXIMATE PRICE LEVEL PROFIT-ORIENTED PRICING APPROACHES Target Profit Pricing Target Return- on-Sales Pricing Target Return-on-Investment Pricing LO1 FIGURE 14-4 .
