Ch. 11- :Picing Strategies: Additional Flashcards
- What is a cash discount? What is a functional discount?
Cash discount: discount for paying faster, usually in industrial type of sales
Functional discount: given to members of mkt channel (wholesales/retailers) to reward them for the function that they do (but it is based off of list price aka customer price)
- What is trade loading?
Big discount 2 distributor if they buy more this particular period than they normally owuld buy
cons: window dressing (temporary bc the risk is that next period they won’t buy anything)
Pros: increase mkt share, show you had a big sale
- What is a promotional allowance? Push money?
Promotional allowance: give credit to be able to have in store promotions for your product
Push money: use it to run a contest among sales people to sell more of your product
- What is FOB origin pricing? Uniform delivered pricing? Zone pricing? Freight absorption pricing? Basing point pricing?
Free on Board- price that they give you only includes cost up to a certain point
Uniform-delivery pricing: price is the same if delivered anywhere (“postage stamp pricing”)
Freight absorption pricing: free delivery (bc price is included as fixed cost)
Basing-point pricing: not common, usually in industrial sales, always bill as if everything is shipped from headquarters.
- What is single-price tactic? Flexible pricing? Price lining? Loss - Leader pricing?
Typical of dollar store (everything same price)
Flexible pricing: charging diff. price for the same product in diff. parts of a city
Price lining: used mostly in garment retail (group clothes into line, price the same)
Leader (loss-leader) pricing: price product in store @ costly or slightly below cost to bring in customers to store (ppl are attracted to this price but tend to buy other things @ regular price)
- What is price bundling? Two-part pricing?
Price bundling: ex: laptop bc it includes hardware and software
two-part pricing: fixed fee + variable fee
