Kotler 2020, 11 kap.

The price of a product or service is the amount of money that customers are willing to pay for it. It's a crucial factor in how much revenue a company generates.

Companies must consider their own costs, the value customers perceive, and the prices of competitors when setting prices. They also need to factor in market factors like demand, competition, and economic conditions.

Price is an indicator of how much value a company places on its product. It's also a reflection of how much customers are willing to pay for that value.

Companies can use a variety of strategies to price new products, including premium pricing, penetration pricing, and competitive pricing. The choice depends on factors like the product's uniqueness, the market's size, and the level of competition.

Companies often offer multiple products at different price points, taking into account factors like quality, features, and target audience. Examples include offering basic, premium, and deluxe versions of a product.

Companies use price adjustment strategies to adapt their prices to different customers and situations, taking into account factors like time of purchase, location, and customer loyalty. Examples include discounts, rebates, and price discrimination.

Companies must understand how their pricing decisions affect other stakeholders, such as suppliers, customers, and competitors. They must ensure that their pricing strategies are fair and sustainable over the long term.

Companies use price reaction strategies to respond to changes in the market, competition, or economic conditions. These strategies may include price increases, price decreases, or price matching.

A pricing strategy where a company sets a low initial price to gain market share quickly and benefit from decreasing costs due to economies of scale.

The reduction in production cost per unit as the total output of a good increases. It's based on learning and efficiency improvements.

A pricing strategy where a company adds a standard percentage or amount to the cost of producing a product to determine the selling price.

The benefits of producing and selling large quantities of a product, leading to lower average costs per unit.

The potential risk of experience curve pricing where a competitor develops a more efficient technology, allowing them to undercut the market leader.

The risk that aggressive low pricing may create a perception of low quality amongst consumers.

The assumption in experience curve pricing that competitors will not react to price cuts, which may lead to a price war.

The risk that experience curve pricing strategies may fail if consumers have diverse preferences and companies need to offer a variety of products.

Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices.

Pricing of optional or accessory products along with a main product.

Price steps between various products in a product line are based on cost differences between the products, customer evaluations of different features, and competitors' prices.

It allows companies to offer varying levels of features and benefits at different price points, appealing to a wider range of customers.

It can be very convenient for customers, especially when traveling to a foreign country, as it eliminates the need for additional shopping.

The challenge is to determine the optimal pricing strategy for optional products, as too high a price can deter customers.

Companies need to carefully consider the costs involved in producing optional products, as well as customer demand and competitor offerings.

By offering optional products, companies can increase overall revenue and customer satisfaction.

The relationship between price and the quantity of a good or service that consumers are willing to buy at a given time.

A measure of how sensitive the demand for a product is to changes in its price. It tells us how much demand changes in response to a price change.

When a price increase leads to a relatively small decrease in demand. This means consumers are not very sensitive to price changes.

When a price increase leads to a significant decrease in demand. Consumers are very sensitive to price changes.

A situation where a higher price for a product results in higher demand. This often happens with prestige goods, where consumers associate high prices with quality.

When a company sets a lower price than their competitors, often to gain a larger market share or quickly secure a foothold in the market.

When a company considers potential regulatory action or backlash from consumers when setting prices.

When companies set lower prices to avoid attracting new competitors to the market.

A market situation with many buyers and sellers trading a uniform product, like wheat or copper. No single player has significant market influence. Pricing is determined by supply and demand.

Few sellers offering similar or differentiated products in a market. Each seller is sensitive to competitors' pricing and marketing moves. Examples: petrol stations, airlines.

A market with many sellers, but they offer differentiated products or services, leading to a range of prices. Examples: restaurants, clothing stores.

There is only one seller of a product or service. This seller can set the price, but needs to consider government regulation. Examples: power companies, toll roads.

A market with many buyers and sellers trading a uniform product, but the price is set by supply and demand.

The ability of a seller to set the price for their product or service. This freedom can be limited by market conditions and government regulations.

Strategies used by sellers to differentiate their products or services from competitors. This includes branding, advertising, and sales promotions.

The study of the relationship between consumers and businesses, including how products are created, priced, and marketed.

Dynamic Pricing is a pricing strategy where businesses adjust prices for their products or services in real-time based on factors like demand, costs, and competition.

Showrooming is when customers visit a physical store to examine a product but then purchase it online at a lower price.

Price comparison websites and apps let consumers quickly compare the prices of products from different vendors.

Dynamic pricing can be advantageous for businesses because it helps optimize sales and better serve customers. It allows them to adapt to market changes and maximize revenue.

Dynamic pricing can also harm businesses if not implemented carefully. It can lead to price wars and damage customer relationships if customers perceive the pricing as unfair or manipulative.

Store retailers are responding to showrooming with strategies such as price matching, offering exclusive in-store deals, and providing personalized service. The goal is to create a more compelling in-store experience and encourage purchases.

Even with free shipping and returns, online sales may not always be as profitable as physical store sales because customers might be more likely to make impulse purchases and buy higher-priced items in stores.

Dynamic pricing makes it crucial for businesses to maintain transparency and fairness in their pricing practices to avoid alienating customers. Consumers may get frustrated with fluctuating or unclear prices, ultimately hurting a company's brand reputation.