Chapter 14 Flashcards
- competition oriented approaches
- cost oriented approaches
- profit oriented approaches
- demand oriented approaches
what are these ?
the approaches for selecting an approximate price
*customary
*above, at, or below market
*loss leader
which approximate price approach is this ?
competition oriented approaches
*standard markup
*cost-plus
*experience curve
which approximate price approach is this ?
cost oriented approaches
*target profit
*target return on sales
*target return on investment
which approximate price approach is this ?
profit oriented approaches
*skimming
*penetration
*prestige
which approximate price approach is this ?
demand oriented pricing approach
a pricing strategy that improves price realization by varying price by type of customer
what is this ?
price customization
price customization that can change real time based on constantly updated data
what is this ?
dynamic pricing
what are the 4 main factors that affect value and price customization ?
- tastes
- nature of use
- intensity of use
- competition
setting the highest initial price that customers really desiring the product are willing to pay when introduce a new or innovative product
what is this ?
skimming pricing
setting a low initial price on a new product to appeal immediately to the mass market
what is this ?
penetration pricing
setting a high price so that quality or status conscious customers will be attracted to the product and buy it
what is this ?
prestige pricing
setting the price of a line of product at a number of different specific pricing points
what is this ?
price lining
setting prices a few dollars or cents under an even number
what is this ?
odd even pricing
consists of (1) estimating price that ultimate consumers would be willing to pay for a product (2) working backward through markups take by retailers and wholesalers to determine what price to charge wholesalers, and then (3) deliberately adjusting the composition and features of the product to achieve the target price to consumers
what is this ?
target pricing
marketing two or more products in a single package price
what is this ?
bundle pricing
adding a fixed percentage to the cost of all items in a specific product class
what is this ?
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
what is this ?
cost plus pricing
setting an annual target of a specific dollar volume of profit
what is this ?
target profit pricing
setting a price to achieve a profit that is specified percentage of sales volume
what is this ?
target return on sales pricing
setting a price to achieve an annual target return on investment (ROI)
what is this ?
target return on investing pricing
setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors
what is this ?
customary pricing
setting a market price for a product or product class based on a subjective feel for the competitors price or market price as the benchmark
what is this ?
above, at, or below market pricing
deliberately selling a product below its customary price, not to increase sales, but to attract customers attention to it in hopes that they will buy other products with large markups as well
what is this ?
loss leading pricing
setting one price for all buyers of a product or service
what is this ?
fixed price policy
setting different prices for products and services in real time in response to supply and demand conditions
what is this ?
dynamic pricing policy
setting prices for all items in a product to cover the total cost and produce a profit for the complete line, not necessarily for each item
what is this ?
product line pricing
reductions from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller
what is this ?
discounts
reductions in unit costs for a longer order
what is this ?
quantity discounts
to encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use ?
seasonal discounts
to reward wholesalers and retailers for marketing functions they will perform in the future, a manufacturer often gives ?
trade or functional discounts
to encourage retailer to pay their bills quickly manufacturers offer them ?
cash disocunts
reductions from list or quoted prices to buyers for perfuming some activity
what is this ?
allowances
price reduction given when a used product is accepted as part of the payment on a new product
what is this ?
trade in allowance
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
what is this ?
promotional allowances
the practice of replacing promotional allowances with lower manufacturer list prices
what is this ?
everyday low pricing
price the seller quotes that includes only the cost of loading the product onto the vehicle and specific the name of ht location where the loading is to occur
what is this ?
FOB origin pricing
the price the seller quotes that includes all transportation costs
what is this ?
uniform delivered pricing
all buyers pay the same delivered price of the products regardless of their distance form the seller
what is this ?
single zone pricing
a firm divides its selling territory into geographical areas or zones
what is this ?
multiple zone pricing
selecting one or more geographical locations from which the list price for products plus freight expenses are charger to the buyer
what is this ?
basing point pricing
a conspiracy amount firms to set prices for a product
what is this ?
price fixing
charging different prices to different buyers for products of like grade and quality
what is this ?
price discrimination
price deals that mislead consumers fall into the category of ?
deceptive pricing
charging a very low price for a product with the intent of driving competitors out of business
what is this ?
predatory pricing
who is responsible for the final price to customers ?
retailers
