Pricing Concepts

Price is that which is given up in an exchange to acquire a good or service. Consumers are generally interested in obtaining "reasonable price," which really means perceived reasonable value at the time of the transaction. Nike's prices are based on the idea that consumers will perceive a product with a high price as a predictor of good quality. Position also plays a role for Nike's pricing. Nike has spent a lot of money to promote their brand as the top of their market. Because the Nike swoosh has become such a prestigous logo, consumers are willing to pay the extra money for just that.