Chapter 11 Flashcards
Fixed cost
When money dose not very with the number of units sold.
Example for a fixed cost
rent/utilities and insurance premiums
psychological pricing
based on the believe that customers perceptions of a product are strongly influenced by price.
example for a psychological pricing
used by retail pricing
prestige pricing
higher than average pricing that is used to suggest status and prestigious to the customer.
Example for prestige pricing
Since the shirt cost $100 the shirt has goos quality.
Odd even pricing
where old numbers are employed to suggest barons
Example for odd even pricing
$1.99
price lining
Items in certain category are priced the same.
Example for price lining
fruit snacks, the price will be determined based off of the other brands.
Promotional pricing
lower prices are offered for a limited period of time
Example for promotional pricing
Taco Tico promotes $.99 tocos for a limited time
Multiple- unit pricing
Items are priced in multiples
Example of multiple- unit pricing
buy 3 pairs off this for only $.99
Bundle pricing
several complimentary pieces are sold at a single price
Example for Bundle pricing
Computer companies
Discount Pricing
offers customers reduction from original price to encourage discounts.
Example for dicount pricing
percentage off of discounts
2/10, net/30
the buyer can reduce selling experiences by 2% by paying in ten days. And if they don’t they need to pay in 30 days.
Break Even Point
The gain from your business activity equals the cost included in presetting it.
Example for a break even profit
It gives you an idea of the number of units you must sell to make a profit.
Mark up
the amount added to the cost of an item to cover expenses.
Mark down
the amount of money taken from the original price
Example for a mark down price
Business sometimes may ned to mark down their product so that people will buy them.
