BUS4098 Week 3

Marketing Decisions-Pricing

© 2016 South University

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Business Simulation

©2016 South University

2 [Document Title]

[Parent Lecture Name]

Marketing Decisions-Pricing

Apart from the signal that a price change sends to the market, an important factor that needs to be considered is the effect of price change on retailers, who sit between you and the customers. Retailers want to avoid two things. First, they don't want your shoes collecting dust on their shelves because the price is too high. Second, they don't want customers going away disappointed because a shoe they wanted was sold out due to its low price.

We will look more at managing retailers later. For now, just note the tradeoff that you face here. Pricing is flexible and powerful, but that very power means that you have to be prudent in taking advantage of this flexibility. Although it is powerful, price is just one element in most marketing strategies. Failure to consider the interactions of nonprice variables is a major flaw in some strategies in the simulation. Let's look at some of those considerations.