Prices are often set to satisfy demand or to reflect the premium that consumers

Question

Prices are often set to satisfy demand or to reflect the premium that consumers are willing to pay for a product or service. Some critics shudder, however, at the thought of $2 bottles of water, $150 running shoes, and $500 concert ticket. Take a position: Prices should reflect the value consumers are willing to pay versus Prices should reflect only the cost of making a product or delivering a service. (Use research to support your position and cite your sources). What does the literature say about pricing strategies?

Explanation / Answer

Prices should reflect the value that consumers are willing to pay versus prices should primarily just reflect the cost involved in making a product or service.

Pro: Price, perhaps more than any other element of the marketing mix, communicates value to the consumer. In the consumer-decision making process, we have learned that customers are value-maximizers. They form an expectation of value and act on it. A buyer

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.