Chapter 14 Flashcards
weigh factors underlying expected customer tastes and preferences more heavily than profit
demand-oriented pricing
setting the highest initial price that customers really desiring the product are willing to pay when introducing a new product
skimming
setting the lowest initial price on a product to appeal immediately
penetration pricing
introduces a high price and keeps the high price
prestige pricing
setting the price of a line of products at a number of different pricing points
price lining
setting prices a few dollars or cents under an even number
odd-even pricing
estimating the price that ultimate consumers would be willing to pay for a product
target pricing
Marketing two or more products in a single package price
bundle pricing
a price setter stresses the cost side of the pricing problem not the demand side
cost-oriented pricing
Adding a fixed percentage to the cost of all items in a specific product class.
standard markup 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.
cost-plus pricing
pricing approach that involves
- target profit
- target return on sales
- target return on investment
profit-orientated pricing
pricing approach that involves
- customary pricing
- above-, at-, or below-market
pricing
- loss leader
competition-orientated pricing
setting a price by tradition or other competitive factors
customary pricing
setting a market price for a product based on the competitor’s price
above, at, or below market pricing
selling a product below its customary price to attract customer’s attention so they will buy large markup products
loss-leader pricing
setting one price for all buyers of a product or service
fixed-price policy
setting different price for products and services in real time responding to supply and demand
dynamic pricing policy
Setting prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item
product line pricing
reductions from the list price that a seller gives a buyer as a reward for some favorable activity
discounts
Reductions in unit costs for a larger order
quantity discounts
buyers to stock inventory earlier than their normal demand would require
seasonal discounts
to reward wholesalers and retailers for marketing functions they will perform in the future
trade discounts
discounts that encourage retailers to pay their bills quickly
cash discounts
reductions from list or quoted prices to buyers
allowances
a price reduction given when a used product is accepted as part of the payment on a new product
trade-in allowances
cash payments or an extra amount of “free goods” awarded sellers in the marketing channel for undertaking certain advertising or selling activities to promote a product
promotional allowances
the practice of replacing promotional allowances with lower manufacturer list prices
everyday low pricing
price fixing
