Price, the Only Revenue Generator

Read this chapter for a thorough treatment of the critical concept of price, which the authors note is the only means a company has of generating revenue. This chapter discusses the process companies must go through to effectively price their offerings, including identifying pricing objectives, accounting for the factors that affect pricing decisions, and implementing a pricing strategy. Pay attention to concepts of pricing basics, value pricing, target pricing, price sensitivity and elasticity, dynamic pricing, rack pricing, and loss leaders.

Discussion Questions and Activities

DISCUSSION QUESTIONS

  1. What is the difference between leader pricing and a loss leader?
  2. Which pricing approaches do you feel work best long term?
  3. When is price discrimination legal?
  4. Which pricing strategies have you noticed when you shop?
  5. What new products have you purchased in the last two years that were priced using either a penetration or a skimming approach?