Chapter 13-Pricing Products and Services Flashcards
Price
Money or other considerations exchanged for a good or service
Pricing Contraints
Factors that limit the latitude of price a firm may set
Pricing Objectives
Expectations that specify the role of price in an organizations marketing and strategic plan
Demand Curve
the summation of points representing the maximum number of products consumer will buy at a given price
Price Elasticity of Demand
The % change in quantity demanded relative to % change in price
Skimming Pricing
The highest initial price that customers really desiring a product are willing to pay
Penetration Pricing
Setting a a initial low price on a new product to appeal immediately to a mass market
Prestige Pricing
Setting a high price on a product to attract quality or status conscious consumer
Price Lining
Pricing a line of products at a number of different specific pricing points
Odd-Even Pricing
Setting prices a few dollars of cents under an even number
Target Pricing
The practice of deliberately adjusting the composition and features of a product to achieve the target price to consumers
Bundle Pricing
The marketing of two or more products in a single “package price”
Yield Management Pricing
The charging of different prices to maximize revenue for a set amount of capacity at any given price
Standard Markup Pricing
Adding a fixed percentage to the cost of all items in a specific product class
Cost-Plus pricing
Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price
Experience curve pricing
Pricing method based on production experience, that is, the unit cost of many products and services decline by 10 to 30% each time a firms experience at producing and selling them doubles
Target profit pricing
Pricing method based on an annual target of a specific dollar volume of profit
Customary pricing
Setting prices dictated by tradition, standardized channels of distribution, or other competitive factors
Loss-Leader Pricing
Selling products below their customary pricing to attract attention to them
Three demand factors that affect price?
a.) Consumer Tastes b.) Price and availability of other products c.) Consumer income
Four General Approaches of finding price level
Demand-orientated
Cost-orientated
Profit-Orientated
Competition-Orientated
