Chapter 12 Flashcards
What is an integral element of the retail marketing mix?
Price
What are the considerations in setting retail pricing?
Customer price sensitivity, Competition, Price discrimination
Which of the following is an example of legal and ethical pricing issue?
Price discrimination
According to the statement, “Pricing is a function of benefits and cost, much more than the issue of supply and
demand,” what primarily influences pricing?
Benefits and cost
How are prices established?
Price, Counter trade
Which term describes the price paid for a college education?
Tuition fee
What are some other terms to describe prices?
Premium, Taxes, Salary or wage
What are common objectives that guide pricing decisions?
Ensure market survival, Enhance sales growth, profitability
What are the 5 Cs of Pricing?
Costs, Customers, Channels of Distribution, Competition, Compatibility
What is perceived monetary price?
The customer’s perception of the monetary value of the product/service
What does the price/quality relationship attempt to describe?
The extent to which customers associate price with quality
What is the relationship between prices and quantity demanded known as?
Demand curve
When does inelastic demand exist?
When price changes do not result in significant changes in quantity demanded
What is markup pricing?
Adding a percentage to the cost of an item to determine its retail price
Which pricing strategy involves offering different prices to different customer segments?
Differential pricing
It is a guide for a successful pricing strategy.
- Pricing objectives
A strategy used by businesses to attract customers to a new product or service by offering lower price.
Penetration Pricing
The portion or percentage that the company owns out of the total revenue/sales of the product in the industry.
Market Share
A good understanding of cost and demand relationship is a requirement in making pricing decision that will maximize profit. -
Profitability
A strategy for profit maximization where businesses set high price for their product before reducing it gradually as their way of attracting price-sensitive customers. -
Price skimming
A pricing strategy where the price is set to match or beat competitors’ prices to remain competitive in the market.
Competitive Pricing
The perceived value of a product/service in the eyes of the customer, which influences their willingness to pay.
Perceived Value
The pricing strategy where different prices are set for different segments of customers based on factors such as location, time, or customer demographics.
Differential Pricing
The pricing strategy where prices are set at a level that covers costs and ensures a reasonable profit margin. -
Cost-Plus Pricing
