10. Pricing products Flashcards
Customer perception of value (price ceiling)
Product costs (price floor)
Marketing strategy, objectives and marketing mix
Nature of market and demand
Competitors’ strategies and prices
Major pricing strategies
The amount of money charged for a product or service; the sum of the values that consumers exchange for the benefits of having or using the product or service
Price
Setting prices based in buyers’ perceptions of value rather than on the seller’s cost
Customer value-based pricing
Offering just the right combination of quality and good service at a fair price
Good-value pricing
Attaching value-added features and services to differentiate a company’s offers and to support charging higher prices
Value-added pricing
Setting prices based on the costs for producing, distributing and selling the product plus a fair rate of return for effort and risk
Cost-based pricing
Costs that do not vary with production or sales level
Fixed costs (or overhead)
Costs that vary directly with the level of production
Variable cost
The sun of the fixed and variable codes for any given level of production
Total costs
The drop in the average per-unit production cost that comes with accumulated production experience
Experience curve (or learning curve)
Adding a standard markup to the cost of the product
Cost-plus pricing (or markup pricing)
Setting prices to break even on the costs of making and marketing a product, or setting prices to make a target profit
Break-even pricing
Setting prices based in competitors’ strategies, costs, prices and market offerings
Competition-based pricing
Pricing that starts with an ideal selling price and then targets costs that will ensure that the price is met
Target costing
What are the different types of markets for pricing?
Pure competition
Monopolistic competition
Oligopolistic competition
Pure monopoly
