Brand Equity is a set of assets (and liabilities) linked to a brand’s name and symbol that adds to (or substracts from) the value provided by a product or service to a firm and/or that firm’s customers.
Brand Equity Increases Value Brand Equity Brand Loyalty Brand Awareness Perceived Quality Brand Associations Other Brand Assets Value to Customer Value to Firm
Market share , Pricing objectives used to increase or maintain market share.
Survival , accept short term losses necessary for survival
Types of Cost Factors that Affect Pricing Decisions Total Costs Sum of the Fixed and Variable Costs for a Given Level of Production Variable Costs Costs that do vary directly with sales or production levels. Commissions, Raw materials Fixed Costs (Overhead) Costs that don’t vary with sales or production levels. Executive Salaries, Rent
Generate much needed initial cash flow, cover high R&D costs.
This type of pricing structure works very well for products that are in demand or where there are few competitors - electronic equipment for example.
Price Level Policies 17-5 “ Skim the cream” pricing involves selling at a high price to those who are willing to pay before aiming at more price-sensitive consumers. Price Quantity Initial skimming price Second price Final price Skimming Pricing Sell at high price before reducing to next price level and repeat