Marketing Mix: Price Flashcards
What is pricing?
The process of setting the value that a manufacturer will receive in exchange for services and goods.
What factors influence pricing strategies?
- Company monopoly or competitive position
- Elasticity of demand
- Nationally advertised prices or government restrictions
- Buying habits of customers
- Availability of the product
- Manufacturers suggested prices
- Fair trade laws
- Consumers’ income
- Quality of the product
- Consumer demand for the product
What is competitive pricing?
Using competitors’ prices to set your own price without considering production costs or consumer demand.
What is cost-plus pricing?
A pricing strategy that involves the cost of production plus a markup price. Cost + Profit = SP
What is value-based pricing?
Setting prices according to what customers think the product is worth.
What is dynamic pricing?
A pricing strategy where prices are based on market and customer demands.
What is price skimming?
Setting prices higher for a newly launched product and then lowering them as the product becomes less popular.
What is penetration pricing?
Setting prices lower for a newly launched product and then raising the price as it becomes popular.
What is differential pricing?
Setting different prices for different consumers based on regions, time, areas, products.
What is high-low pricing?
Setting a price high initially and then lowering it as the product becomes irrelevant.
What is prestige pricing?
Setting high prices to create an impression of high quality.
What is promotional pricing?
Reducing the price of a product in the short term to attract more customers and increase sales volume.
How do you determine pricing potential?
Price determination can be based on cost, demand, and location.
What factors should be considered when determining buyers’ personality?
- Customer Lifetime Value
- Willingness to pay
- Customer Pain Points
