Chapter 10: Understanding and Capturing Customer Value
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Across
the costs that vary with the level of production
the price at which total costs are equal to total revenue and there is no profit
the price at which the firm will break even or make the profit it’s seeking
the sum of the fixed and variable costs for any given level of production
illustrates the response of demand to a change in price
charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items
shows the number of units the market will buy in a given period at different prices
setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk
occurs when demand changes greatly for a small change in price
starts with an ideal selling price based on consumer value considerations and then targets costs that will ensure that the price is met
Down
charging a constant everyday low price with few or no temporary price discounts
occurs when demand hardly changes when there is a small change in price
offers the right combination of quality and good service at a fair price
uses the buyers’ perceptions of value, not the sellers cost, as the key to pricing
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.
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