What is the EVC?
Expected value to the customer is the maximum a customer should be willing to pay for your product. It is the purchase price of the next best alternative +/- the value difference between the next best alt and your product. (see chart)
What are the 3 complications to the EVC?
1. the incentive
2. identifying value
3. tradeoffs
Learn More :
Pricing
- What are the four things firms may rely on to obscure the comparability of competing offerings?
- How do firms manipulate perceptions of uniqueness?
- Why do firms engage in product development?
- What does the EVC assume?
- What is random discounting and when is it attractive?
- What is periodic discounting?
- What is sequential skimming?
- What is second market discounting and when is it attractive?
- What are the 5 ways in which firms price discriminate?
- What is "price lining"?
- In terms of pricing, what is the best way to segment the market?
- Why are there tradeoffs with the EVC?
- When estimating the value advantage, what types of value may come into play?
- When setting the incentive, what must the manager consider about the customer?
- How does marketing contribute to the pricing discussion?
- How can economics help in pricing?
- How can accounting help in pricing?
- From a strictly marketing perspective, in what ways would a marketer's activities be relatively unaffected by knowledge of demand activities?
- In the short term, what are the two reasons for price not changing smoothly with supply and demand? aka violations of supply and demand?
- Savings for You, a discount retail chain, is highly competitive. When entering a new market, Savings for You often cuts prices so deeply that it sells below costs, effectively pushing smaller companies with less purchasing power out of the market. Savings for You is most at risk of being accused of ________.
- Big Mike's Health Food Store sells nutritional energy-producing foods. The price of the products sold varies according to individual customer accounts and situations. For example, long-time customers receive discounts. This strategy is an example of ________.
- If Northwest Awnings charges the same price for delivery of their product to any customer that is located within the Great Lakes states, the company is using ________.
- Busch Stadium in St. Louis charges different prices for seats in different areas of the ballpark, even though their costs are the same. What is this form of pricing called?
- Vac 'N' Sew will give customers $100 for a used vacuum cleaner, regardless of condition, when they purchase a new vacuum or sewing machine. This essentially reduces the price by $100. What is this type of discount called?