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Pricing Strategy > Consumer Psychology and Pricing > Flashcards

Consumer Psychology and Pricing Flashcards

1
Q

The study of how people think feel behave when making a purchase

A

Consumer Psychology

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2
Q

Comparing an observed price to an internal reference price they remember or to an external frame of reference such as a posted regular retail price

A

Reference Prices

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3
Q

Many consumers use price as an indicator of quality

A

Price-quality inferences

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4
Q

Many sellers believe prices should end in odd numbers

A

Price Endings

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5
Q

Enumerate the steps in setting pricing policy

A
  1. Selecting the Pricing Objective
  2. Determining Demand
  3. Estimating Costs
  4. Analyzing Competitor’s Cost, Price and Offers
  5. Selecting a Pricing Method
  6. Selecting the Final Price
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6
Q

Some companies want to maximize their market share they set the lowest price assuming the market is price sensitive

A

Maximize Market Share

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7
Q

Company is unveiling a new technology favor setting high prices to maximize market skimming

A

Maximize Market Skimming

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8
Q

A company might aim to be the product quality leader in the market many brands try to be affordable luxuries products or services characterized by high levels of perceived quality taste and status with the price just high enough not to be out of consumers reach

A

Product-Quality Leadership

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9
Q

Explores how many units consumers would buy at different proposed prices although there is always the chance they might understate their purchase intentions at higher prices to discourage the company from setting higher prices

A

Surveys

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10
Q

Varies the prices of different products in a store or charge different prices for the same product in similar territories to see how the change affects sales

A

Price experiments

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11
Q

Marketers need to know how responsive or elastic demand would be to a change in price

A

Price elasticity of demand

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12
Q

Adding a standard markup to the product’s cost

A

Markup Pricing

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13
Q

The firm determines the price that would yield its target rate of return on investment

A

Target Return Pricing

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14
Q

Made up of several elements such as the buyers image of the product performance the channel deliverables the warranty quality customer support and software attributes such as the suppliers reputation trustworthiness and esteem

A

Perceived-Value Pricing

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15
Q

Charging a fairly low price for a high quality offering

A

Value Pricing

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16
Q

The firm bases its price largely on competitors prices charging the same more or less than major competitors

A

Going-Rate Pricing

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17
Q

Enumerate the price adaptation strategies

A
  1. Geographical Pricing
  2. Price Discounts and Allowances
  3. Promotional Pricing
  4. Differentiated Pricing
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18
Q

The company decides how to price its product to different customers in other locations and countries

A

Geographical Pricing

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19
Q

The buyer and seller directly exchange goods with no money and no third party involved

A

Barter

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20
Q

The seller receives some percentage of the payment in cash and the rest in products

A

Compensation Deal

21
Q

The seller sells a plant equipment or technology to another country and agrees to accept as partial payment products manufactured with the supplied equipment

A

Buyback Arrangement

22
Q

The seller receives full payment in cash but agrees to spend a substantial amount of the money in that country within a stated time period

A

Offset

23
Q

A price reduction to buyers who pay bills promptly

A

Discount

24
Q

A price reduction to those who buy large volume

A

Quantity Discount

25
Q

Offered by manufacturer to trade channel members if they will perform certain functions such as selling storing and record keeping

A

Functional Discount

26
Q

A price reduction to those who buy merchandise or services out of season

A

Seasonal Discount

27
Q

An extra payment designed to gain reseller participation in several programs

A

Allowance

28
Q

Most companies will adjust their least price and give discounts and allowances for early payment volume purchases and off season buying

A

Price Discounts and Allowances

29
Q

Strategies are often a zero sum game

A

Promotional Pricing

30
Q

Companies often adjust their basic price to accommodate differences in customers product location etc

A

Differentiated Pricing

31
Q

Occurs when a company sells a product or service at two or more prices that do not reflect a proportional difference in cost

A

Price Discrimination

32
Q

The seller charges separate price to each customer depending on the intensity of his or her demand

A

First Degree Price Discrimination

33
Q

The seller charges less to buyers who buy a large volume

A

Second Degree Price Discrimination

34
Q

The seller charges different amounts to different classes of buyers

A

Third Degree Price Discrimination

35
Q

Different customer groups pay different prices for the same product or service

A

Customer Segment Pricing

36
Q

Different versions of the products are price differently but not proportionately to their cost

A

Product Form Pricing

37
Q

Some companies price the same product at two different levels based on image differences

A

Image Pricing

38
Q

The use of distribution channels is a factor in pricing it is common for firms to offer different prices depending on where you buy an item

A

Channel Pricing

39
Q

The same product is price differently at different locations even though the cost of offering it at each location is the same

A

Location Pricing

40
Q

Prices are varied by season day or hour

A

Time Pricing

41
Q

The ratio of what customers receive to what they have to pay for it

A

Value

42
Q

Use as a set of algorithms that analyze past and current merchandise sales and prices estimator relationship between prices and sales regenerated and then determine the optimal initial price for the merchandise and appropriate size and timing of markdowns

A

Merchandising Optimization Software

43
Q

The practice of offering two or more different products or services for sale at one price

A

Practice Bundling

44
Q

The practice of charging different prices in different stores markets region or zone

A

Zone Pricing

45
Q

Sale of an important product at the price lower than that normally charged in a domestic market or country of origin

A

Dumping

46
Q

Representatives of two or more companies secretly set similar prices for their products

A

Price fixing

47
Q

Occurs when a manufacturer conspires with wholesalers or retailers to ensure certain retail prices are maintained

A

Vertical Price Fixing

48
Q

Property but and sold by operating units or divisions of a company doing business with an affiliate in another jurisdiction

A

Transfer Pricing

49
Q

Occurs when payment is made in some form other than money

A

Countertrade

Pricing Strategy (1 decks)

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