Marketing - Price concepts for establishing value
1. What does an everyday low pricing strategy say to consumers?
2. Margaret has been invited to a fancy dinner party and wants to bring a nice box of chocolates as a gift for the host. Since she does not know much about fine chocolate, she will likely use the price of the chocolates as __________.
A. an indicator of quality. B. a reflection of status quo pricing. C. an indicator of the variety.?D. a measure of scarcity.?E. a measure of the income effect.
3. How is consumer behavior affected by the "income effect"? (income effect refers to the change in the quantity of a product demanded by consumers due to a chance in income)
4. Think of a recent purchase you made. Was price the deciding factor on whether you purchased it or not? Base you answer on at least one pricing strategy from the chapter.
Pricing strategies are built around 5 critical components.
• Company objectives
o Profit orientation
o Demand curves and pricing
o Price elasticity of demand
• Channel members.