The Three Cs Model for Price Setting prices and assessment/ High Price Low Price Costs Competitors' Customers No possible prices of of unique No possible profit at substitutes product demand at Is price eatures this price
6 The Three C’s Model for Price Setting Costs Competitors’ prices and prices of substitutes Customers’ assessment of unique product features Low Price No possible profit at this price High Price No possible demand at this price
2. Setting Pricing Policy 1. Selecting the pricing objective 2. Determining demand 3. Estimating costs 4. Analyzing competitors costs, prices, and offers 5. Selecting a pricing method 6. Selecting final price
7 2.Setting Pricing Policy 1. Selecting the pricing objective 2. Determining demand 3. Estimating costs 4. Analyzing competitors’ costs, prices, and offers 5. Selecting a pricing method 6. Selecting final price
3. Pricing objectives (1)Survival L Low price 2)sales m Maximum current revenue 口 Maximum sales growth
8 3. Pricing Objectives (1) Survival Low price (2) Sales Maximum current revenue Maximum sales growth
()Profit L! Maximum market skimming 口 Maximum current profit (4)Market leadership Market share (5)Product-quality leadership 9
9 (3) Profit Maximum market skimming Maximum current profit (4) Market leadership：Market share (5) Product-quality leadership
ypes of costs Fixed Costs Variable costs (Overhead Costs that don't Costs that do vary vary with sales or directly with the production levels. level of production. Executive Salaries Raw materials Rent Total Costs Sum of the Fixed and Variable Costs for a Given Level of Production
10 Types of Costs Total Costs Sum of the Fixed and Variable Costs for a Given Level of Production Fixed Costs (Overhead) Costs that don’t vary with sales or production levels. Executive Salaries Rent Variable Costs Costs that do vary directly with the level of production. Raw materials