Lecture Principles of Marketing - Chapter 10: Understanding and capturing customer value presents the following content: What is a price? Major pricing strategies, other internal and external considerations affecting price decisions. | Chapter Ten Pricing: Understanding and Capturing Customer Value 1 Pricing: Understanding and Capturing Customer Value What Is a Price? Major Pricing Strategies Other Internal and External Considerations Affecting Price Decisions Topic Outline 2 Price is the amount of money charged for a product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service. What Is a Price? Note to Instructor Discussion Question How does a company like Starbuck’s price their products? This will lead to a good overview of the chapter as students will most likely focus on customers, costs and competitors. 3 Price is the only element in the marketing mix that produces revenue; all other elements represent costs What Is a Price? 4 Major Pricing Strategies Understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value Customer Value-Based Pricing 5 Major . | Chapter Ten Pricing: Understanding and Capturing Customer Value 1 Pricing: Understanding and Capturing Customer Value What Is a Price? Major Pricing Strategies Other Internal and External Considerations Affecting Price Decisions Topic Outline 2 Price is the amount of money charged for a product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service. What Is a Price? Note to Instructor Discussion Question How does a company like Starbuck’s price their products? This will lead to a good overview of the chapter as students will most likely focus on customers, costs and competitors. 3 Price is the only element in the marketing mix that produces revenue; all other elements represent costs What Is a Price? 4 Major Pricing Strategies Understanding how much value consumers place on the benefits they receive from the product and setting a price that captures that value Customer Value-Based Pricing 5 Major Pricing Strategies Customer Value-Based Pricing 6 Major Pricing Strategies Value-based pricing uses the buyers’ perceptions of value, not the sellers cost, as the key to pricing. Price is considered before the marketing program is set. Value-based pricing is customer driven Cost-based pricing is product driven Customer Value-Based Pricing Note to Instructor Students often confuse value with low price. You might want to bring up a product that some of them will value even at a high price. You can bring up the latest iPhone product or a luxury car. Some students will feel that the price for these products is too high, however, others will see the value these products offer to the consumer. 7 Major Pricing Strategies Customer Value-Based Pricing 8 Major Pricing Strategies Good-value pricing offers the right combination of quality and good service at a fair price Customer Value-Based Pricing Note to Instructor Existing brands are being redesigned to offer more quality for a given price or the
