Examples of consumer price index in the following topics:
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- For example, if prices decline, consumers have greater buying power.
- A consumer price index (CPI) measures changes in the price level of consumer goods and services purchased by households.
- A CPI can be used to index (i.e., adjust for the effect of inflation) the real value of wages, salaries, pensions, for regulating prices and for deflating monetary magnitudes to show changes in real values.
- Consumer confidence is formally measured by the Consumer Confidence Index (CCI), a monthly release designed to assess the overall confidence, relative financial health and spending power of the US average consumer.
- Illustrate the relationship between consumer purchasing power, pricing and the economy
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- 'certified organic' and 'product of Australia') may add value for consumers[1] and attract premium pricing.
- In certain supply chains, where a manufacturer sells to a wholesale distributor, and the distributor in turn sells to a retailer, the use of a suggested retail price is used to denote the price to use when selling to the consumer.
- They must decide on a price that is attractive to the consumer and yields the maximum profit for the retailer.
- Value to the customer should be taken into consideration in addition to pricing objectives, profit maximization, geographic and buying habit considerations, discounting, rate of return, competitive indexing, the image conveyed by the price, customer price sensitivity, any legal restrictions, the category price points, price ceilings and floors and how payment is to be made.
- In economic terms, it is a price that shifts most of the consumer surplus to the producer.
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- Otherwise, there would be no reason for consumers to purchase that product over any other product on the market.
- Characteristics of a product also help to determine the price of a product.
- Some high end features will increase the price of the product, while low-end features could decrease the price of the product.
- This can determine where a product may fall on the price index.
- Some consumers need an Internet marketing approach, while other consumers may be more receptive to television or magazine ads.
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- Products and services frequently have customary prices in the minds of consumers.
- Odd prices are intended to drive demand greater than would be expected if consumers were perfectly rational.
- Consumers tend to react very positively to these pricing techniques.
- Consumers ignore the least significant digits rather than do the proper rounding.
- Fractional prices suggest to consumers that goods are marked at the lowest possible price.
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- Demand-based pricing is any pricing method that uses consumer demand - based on perceived value - as the central element.
- Demand-based pricing, also known as customer-based pricing, is any pricing method that uses consumer demand - based on perceived value - as the central element.
- The objective of a price skimming strategy is to capture the consumer surplus.
- Product heterogeneity, market frictions, or high fixed costs (which make marginal-cost pricing unsustainable in the long run) can allow for some degree of differential pricing to different consumers, even in fully competitive retail or industrial markets.
- The theory is this drives demand greater than would be expected if consumers were perfectly rational.
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- Although there are legal concerns around monopolistic practices, price discrimination is a popular tactic for capturing consumer surplus.
- Price discrimination's effects on social efficiency are unclear; typically such behavior leads to lower prices for some consumers and higher prices for others.
- Even if output remains constant, price discrimination can reduce efficiency by misallocating output among consumers.
- Although price discrimination is the producer's or seller's legal attempt to charge varying prices for the same product based on consumer demand, price discrimination can be illegal in some cases.
- Here, the monopoly seller knows the maximum price each individual buyer is willing to pay, allowing them to absorb the entire consumer surplus.
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- Value-based pricing seeks to set prices primarily on the value perceived by customers rather than on the cost of the product or historical prices.
- For example, it is critical to understand the consumer buying process.
- How important is price?
- If you have, you know that most consumers have poor price knowledge.
- Examine the rationale behind value based pricing as a pricing tactic
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- This fierce competition has also led to increases in the quality and features of the products offered, as each company attempts to offer a better product to the consumer.
- -- Revenue market share: Revenue market share differs from unit market share in that it reflects the prices at which goods are sold.
- In fact, a relatively simple way to calculate relative price is to divide revenue market share by unit market share.
- The Herfindahl index is a measure of the size of firms in relation to the industry and an indicator of the amount of competition among them.
- Decreases in the Herfindahl index indicate a loss of pricing power and an increase in competition, and vice versa.
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- High-low pricing is a strategy where most goods offered are priced higher than competitors, but lower prices are offered on other key items.
- High-low pricing is a method of pricing for an organization where the goods or services offered by the organization are regularly priced higher than competitors.
- However, through promotions, advertisements, and or coupons, lower prices are offered on other key items consumers would want to purchase.
- The lower promotional prices are designed to bring customers to the organization where the customer is offered the promotional product as well as the regular higher priced products.
- High-low pricing is a type of pricing strategy adopted by companies, usually small and medium sized retail firms.
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- Everyday low price is a pricing strategy offering consumers a low price without having to wait for sale price events or comparison shopping.
- Everyday low price (EDLP) is a pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shopping.
- One 1994 study of an 86-store supermarket grocery chain in the United States concluded that a 10% EDLP price decrease in a category increased sales volume by 3%, while a 10% Hi-Low price increase led to a 3% sales decrease; but that because consumer demand at the supermarket did not respond much to changes in everyday price, an EDLP policy reduced profits by 18%, while Hi-Lo pricing increased profits by 15%.
- Its everyday low prices are available to everyone.
- Translate the meaning of the EDLP (everyday low price) pricing strategy