Ch.17 Flashcards
Price
The amount of money that is charged for something value
Price objectives
Profit maximization objective, sales oriented objectives, and status quo objectives
Price maximization objective
Six to get as much profit as possible
Sales oriented objectives
Seek some level of unit sales, dollar sales, or share of market - without referring to profit
Status quo objectives
Don’t Rock the pricing boat objectives
Non-price competition
Aggressive action on one or more of the Ps other than price
Administered prices
Consciously set prices
One Price policy
Means offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities
Flexible price policy
Offering the same product and quantities to different customers at different prices
Dynamic pricing
Refers to pricing products at a particular customer’s perceived ability to pay
Skimming price policy
Tries to sell the top ( skim the cream ) of a market - the top of the demand curve - at a high price before aiming it more price sensitive customers
Penetration pricing policy
Tries to sell the whole market at one low price
Introductory price dealing
Temporary price cut, to speed new products into a market and get customers to try them
Basic list prices
The prices final customers or users are normally asked to pay
Discounts
Reductions from list price given by a seller to buyers, who either give up some marketing function or provide the function themselves
Quantity discounts
Discounts offered to encourage customers to buy and large amounts
Seasonal discounts
Discounts offered to encourage buyers to buy earlier than present demand requires
Cash discounts
Reductions in price to encourage buyers to pay their bills quickly
Trade ( functional ) discount
A list price reduction given to channel members for the job they’re going to do
Allowances
Given to final customers, business customers, or channel members for doing something or accepting less of something
Advertising allowances
Price reductions given to firms in the channel to encourage them to advertise or otherwise promote the suppliers products locally
Stocking allowances
Sometimes called slotting allowances are given to intermediary to get shelf space for a product
Push money allowances
Sometimes called PMS or spiffs, are given to retailers by manufacturers or wholesalers to pass on to the retailers sales clerks for aggressively selling certain items
Trade in allowances
A price reduction given for used products when similar new products are bought
