Chapter Overview

the need to win customers by allowing them to retain a portion of the value inherent in a product or service and
the need to maintain profit margins sufficient to compensate employees, fund growth, and satisfy the firm’s various stakeholders.

The price of a good or service must be high enough to cover per unit costs—at least in the long term—but cannot exceed its value as perceived by the customer. Therefore, the region between unit cost and perceived value represents the range of feasible prices.
The decision about what price to select from within the range of feasible prices should be based on a careful analysis of competitors’ costs and prices, the product’s strategic objectives, and consistency with other components of the marketing plan.
The final step in deciding what price to charge for a product or service involves the development of a price structure that adapts the price to variations in cost and demand across geographic territories, national boundaries, customer segments, and items within the product line.

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