Chapter 14 – Pricing Concepts for Establishing Value Marketing 6th
Chapter 14
Pricing Concepts for Establishing Value
Tools for Instructors
Brief Chapter Outline
Learning Objectives
Extended Chapter Outline with Teaching Tips
Answers to End of Chapter Learning Aids
Chapter Case Study
Additional Teaching Tips
Connect Activities
Brief Chapter Outline
The Five Cs of Pricing
End of Chapter Learning Aids
Chapter Case Study: Planet Fitness: Pricing for Success
Learning Objectives
LO14-1 List the four pricing orientations.
A profit-oriented pricing strategy focuses on maximizing, or at least reaching a target, profit for the
LO14-2 Explain the relationship between price and quantity sold.
Generally, when prices go up, quantity sold goes down. Sometimes, however—particularly with prestige
LO14-3 Explain price elasticity.
Changes in price generally affect demand; price elasticity measures the extent of this effect. It is based on
LO14-4 Describe how to calculate a product’s break-even point.
Because the break-even point occurs when the units sold generate just enough profit to cover the total
LO14-5 Indicate the four types of price competitive levels.
In a monopoly setting, one firm controls the market and sets the price. In an oligopolistic competitive
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Chapter 14 – Pricing Concepts for Establishing Value Marketing 6th
Extended Chapter Outline with Teaching Tips
I. The Five Cs of Pricing
A. Company Objectives
1. Profit Orientation
2. Sales Orientation
3. Competitor Orientation
4. Customer Orientation
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the five Cs of pricing?
2. Identify the four types of company objectives.
B. Customers
1. Demand Curves and Pricing
2. Price Elasticity of Demand
3. Factors Influencing Price Elasticity of Demand
a. Income Effect
b. Substitution Effect
c. Cross-Price Elasticity
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What is the difference between elastic demand and inelastic demand?
2. What are the factors influencing price elasticity?
C. Costs
1. Variable Costs
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Chapter 14 – Pricing Concepts for Establishing Value Marketing 6th
2. Fixed Costs
3. Total Cost
D. Break-Even Analysis and Decision Making
E. Markup and Target Return Pricing
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What is the difference between fixed costs and variable costs?
2. How does one calculate the break-even point in units?
F. Competition
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the four different types of competitive environments?
G. Channel Members
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