Pricing understanding and capturing customer value - Other Internal and External Considerations Affecting Price Decisions
6 important questions on Pricing understanding and capturing customer value - Other Internal and External Considerations Affecting Price Decisions
What is target costing?
What's the difference between lineair and non-lineair pricing?
Non-lineair pricing holds when the price goes down, the demand goes down as well.
How can we calculate price elasticity?
% change in price; (P1 - P2) / P1
E< 1.0 - price is inelastic
E>1.0 - price is elastic
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What does the demand curve show?
What is the difference between penetration pricing and price skimming?
Price skimming is charging the highest possible price, because the price is inelastic.
Price-demand relationship varies in different types of markets. Explain for pure competition, monopoly and oligopoly?
2. Monopoly: try to differentiate their products by different price segments by branding, advertising, personal branding.
3. Oligopoly: firms are very sensitive to their competitors' strategies.
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