Professional Documents
Culture Documents
Chapter 10 (1)
Chapter 10 (1)
Philip Kotler
Gary Armstrong
Swee Hoon Ang
10 Siew Meng Leong
Chin Tiong Tan
Pricing Products: Oliver Yau Hon-Ming
Capturing Customer
Value
Cost-based pricing
• Types of costs
• Fixed costs
• Variable costs
• Total costs
Cost-based pricing
• Fixed costs are the costs that do not vary
with production or sales level.
• Rent
• Utilities
• Interest
• Executive salaries
Cost-based pricing
• Variable costs are the costs that vary with
the level of production.
• Packaging
• Raw materials
Cost-based pricing
• Total costs are the sum of the fixed and
variable costs for any given level of
production.
• Average cost is the cost associated with a
given level of output.
Unit Cost
Markup Price
(1 - Desired Return on Sales)
• Internal factors
• Company marketing strategy, objectives, and
marketing mix as well as organizational
considerations
Organizational Considerations
• Organizational considerations include
• Who should set the price
• Who can influence prices
https://www.youtube.com/watch?v=KYqvqScg_j8
1.How do you think about the way marketers pricing?
2.List any other factors that marketers can depend on
in order to set an attractive price?