Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

17. Pricing Objectives and
    Policies

Text © The McGraw−Hill

Companies, 2002

482

Chapter

Seventeen

Pricing Objectives

and Policies

482

When You
Finish This Chapter,
You Should

1.Understand how
pricing objectives
should guide strategy
planning for pricing
decisions.

2.Understand
choices the marketing
manager must make
about price flexibility.

3.Know what a
marketing manager
should consider when
setting the price level
for a product in the
early stages of the
product life cycle.

4.Understand the
many possible varia-
tions of a price
structure, including
discounts,
allowances, and who
pays transportation
costs.

5.Understand the
value pricing concept
and its role in obtain-
ing a competitive
advantage and offer-
ing target customers
superior value.

6.Understand the
legality of price level
and price flexibility
policies.

7.Understand the
important new terms
(shown in red).

For years, the Chevy Suburban

utility vehicle was a low-price,

no-frills, work truck targeted at

commercial users. Then changes in

the marketing environment pre-

sented a new opportunity. To turn

the opportunity into profits, mar-

keting managers planned a new

strategy for the Suburban_and

new price policies were a crucial

aspect of the strategy.

In the early 1990s, luxury car

sales to the high-income, baby-

boomer crowd were growing fast.

BMW, Lexus, and Mercedes

sedans seemed to be the ultimate

yuppie status symbol and the lead-

ers in customer satisfaction. Yet

sales of luxury sedans slowed as

affluent consumers looked for

other ways to meet their needs.

One clear sign of this shift was

the growth in demand for fancy

utility vehicles like the Jeep

Grand Cherokee.

As consumer preferences

changed, marketing man-

agers for the Chevy Suburban

changed their strategy. They

turned the Suburban into an

upscale utility vehicle targeted at

place

price

promotion

produc