Pricing, Break-Even, and Margin Analysis
Pricing Considerations
Determining price is one of the most important marketing-mix decisions. The limiting factors are demand and costs. Demand factors, such as buyer-perceived value, set the price ceiling. The company’s costs set the price floor. In between these two factors, marketers must consider competitors’ prices and other factors such as reseller requirements, government regulations, and company objectives.
Most current competing internet streaming products sell at retail prices between $100 and $500. We first consider HD’s pricing decision from a cost perspective. Then, we consider consumer value, the competitive environment, and reseller requirements.
Determining Costs
Recall from Chapter
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