Chapter 19 Flashcards
What is Price skimming?
Setting a high price at first and then lower it over time
What is Penetration Pricing?
Setting a low price to drive market value perceptions
What is a Price/Loss leader? and what are the purposes?
- Selling products at or below costs
- Stimulate sales
- Stimulate store traffic
What is a Special Event Pricing? Ex?
- Special prices linked to a holiday, season or event
- Black Friday
What is Captive Pricing?
The basic product is sold low; replacements are high
What is Price Lining?
Pricing products at several levels; prices are inelastic within different ranges
What is Bait Pricing?
When a product is promised at a low price but is either not in stock or a less attractive product is sold.
Illegal
What are some psychological pricing strategies?
- Odd-Even Pricing
- Best reason
- Reference Pricing
- Menu Manipulation
- EDLP
- Customary Pricing
What is Odd-Even Pricing?
Ending number in odd or non round numbers
What is Best reason?
Prices seem lower
What is Reference Pricing? Ex?
- Displaying a moderately priced product next to an expensive one
- Private label shelving
What is Menu Manipulation
Sweet Spots?
What is EDLP?
setting low prices on consistent basis
What is Customary Pricing?
Setting prices at a customary level
What is Prestige Pricing?
Nobody would buy when they were first introduced
