Exam #4 Part 5 Flashcards
Geographic Pricing (6)
- Origin-point pricing
- Delivered pricing
- Single-zone pricing
- Multiple-zone pricing
- Freight absorption pricing
- Basing-point pricing
Origin-point pricing
FOB (free on board) doesn’t include shipping charge
Delivered pricing
Does incorporate shipping charge
Single-zone pricing
Charges each customer based on average shipping charge on total shipping
Multiple-zone pricing
Modified single-zone
Freight absorption pricing
Seller agrees to return shipping charge
Basing-point pricing
Charged based on certain locations whether it flowed through them or not
Leader Pricing
pricing one or more products attractively to sell a mix
Loss Leader
An extreme example of leader pricing
Price Change Heuristics (2) [depends on (4)]
- Generally FOLLOW when prices are going down
- Generally LEAD when prices are going up
Depends on:
- market share
- production and marketing costs
- product position
- production capacity utilization
Ways to Increase Real Prices (4)
- Adoption of delayed quotation pricing
- Use of escalator clauses
- Unbundling
- Reduction of discounts
List Price
Official Price of a product
Market Price
Actual Price at which a product sells
Deceptive Pricing
Pricing and promotional tactics that disguise the true price customers must pay
Price Fixing
Illegal collaboration between two or more competitors
Price Discrimination
Offering attractive discounts to some customers, but not others for the same product
International Aspects (4)
- Increased Costs (language/packaging)
- Currency Fluctuations (rate changes)
- Protectionism (tariffs)
- Regulations (variable by country)
Dumping
Combination of price discrimination and predatory pricing in international marketing situations
