1. Chapter 20: “Considerations in Price Planning” Joel R. Evans & Barry Berman Marketing, 10e: Marketing in the 21st Century

8. The Role of Price in Balancing Supply and Demand (1) Quantity Price P 2 P E P 1 Q 2 Q 3 Q 1 Q E Consumers Bid Prices Up Sellers Reduce Prices Supply Curve Demand Curve Shortage of Supply Surplus of Supply

10. The Role of Price in Balancing Supply and Demand: Review Quantity Price P 2 P E P 1 Q 2 Q 3 Q 1 Q E Consumers Bid Prices Up Sellers Reduce Prices Supply Curve Demand Curve Shortage of Supply Surplus of Supply

14. Price-Based Approach Quantity Price P 2 P 1 Q 2 Q 1 Demand Curve A firm operating at P 1 Q 1 may increase sales by lowering its prices to P 2 . This increases demand to Q 2 . A firm relying on a price-based approach must lower prices to increase sales.

15. Nonprice-Based Approach Quantity Price P 1 P 2 Q 2 Q 1 Differentiated Product Undifferentiated Product Through a nonprice-based approach , the firm shifts the consumer demand curve to the right by successfully differentiating its products from competitors . This enables the firm to: (a) increase demand from Q 1 to Q 2 at price P 1 , or (b) raise the price from P 1 to P 2 while maintaining a demand at Q 1 .

16. Factors Affecting Price Decisions Total Effects on Price Decisions Consumers Costs Government Channel Members Competition

22. Economy Car = Elastic Demand Quantity (Units) Elastic Demand 12,000 100,000 Price $10,000 $12,000

23. Luxury Car = Inelastic Demand Quantity (Units) Inelastic Demand 18,000 20,000 $50,000 $40,000 Price

25. Government Actions Affecting Price Decisions Price-Fixing Regulations * Horizontal * Vertical Price Decisions Price Advertising Guidelines Prohibitions Against Price Discrimination Among Channel Members Unfair Sales Acts * Predatory Pricing * Loss Leaders Unit Pricing Laws

29. The Competitive Environment of Pricing Market- Controlled Type of Pricing Environment Government- Controlled Price War Company- Controlled