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Summary h13 marketing

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All chapters belong together for a summary of the entire marketing subject taught by professor Nathalie Dens in the 1st year of the HI (B), tew and sew bachelor's degrees

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  • October 3, 2024
  • 8
  • 2023/2024
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Marketing Nathalie Dens

Price and customer value
Price elasticity of demand

Percentage c h ange ∈quantity demanded
E= =η
percentage c h ange ∈ price
 Unit price elasticity of demand
η = -2.26: 10% increase in price produces 26.2% decrease in quantity demanded (and
reversed)
 Zero price elasticity of demand (η = 0)
demand is perfectly inelastic = demand does not change in any way when price changes
 Infinite price elasticity of demand (η = ∞)
consumers will buy as much of a good as possibly at particular price but
at a higher price quantity demanded falls to 0
at a lower price the quantity demanded rises without limits




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, Marketing Nathalie Dens



Concept of pricing and cost

Price:
amount of money expected, required, or given in payment for something

Cost:
represents total money, time and resources sacrificed to produce or acquire an offering

Profit:
total revenue – total costs

- Pricing
o Income, flexible, easy to imitate
o Right price
=> determined by customers
- Proposition costs
o Fixed cost
 Manufacturing plant and equipment, office buildings, cars and other
vehicles, salaries, professional service fees (e.x. legal, architectural)
o Variable costs
 Equipment servicing costs, energy costs, mileage allowances, overtime and
bonus payments, professional services in a business with a strong regulatory
regime (e.x. pharmaceuticals)
- Relationship pricing – costs
o Increases in price
disproportionately positive effect on profit  decreases in price
o Study identified that
 1% increase in price = 8.7% improvement in profit
 1% increase in variable costs = 5.9% improvement in profit
 1% increase in volume sales = 2.8% improvement in profit
 1% increase in fixed costs = 1.8% improvement in profits




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