midterm exam Flashcards
The amount of money that you charge for your products.
Price
The process and methodology used to determine prices for products and services.
Pricing Strategy
Portrays value
Winning pricing strategy
Convinces customers to buy
Winning pricing strategy
Gives your customers confidence in your product
Winning pricing strategy
Doesn’t accurately portray the value in your product
Weak pricing strategy
Makes customers feel uncertain about buying
Weak pricing strategy
Targets the wrong customers
Weak pricing strategy
Setting new product prices high and subsequently lowering the price as competitors enter the market
Skimming pricing
Pricing products based on the price of competitive products, rather than cost or target profit; usually cheaper than competitors
Competitive pricing
Pricing that varies based on marketing and customer demand
Dynamic pricing
Pricing a product based on how much the customer believes it’s worth
Value-based pricing
Entering a market at a low price and increasing prices over time
Penetration pricing
Pricing a product low because of low costs of production, marketing, advertising, and relying on high sales volume to generate profit
Economy pricing
Pricing a product deliberately high to encourage favorable perceptions of the brand based on the price
Premium pricing
Adding a fixed percentage on top of the cost of producing a product, regardless of consumer demand or competitors’ pricing
Cost plus pricing
Offering a product for free alongside paid versions with more features
Freemium pricing
Pricing each finite service or project on a case-by-case basis according to the value of the outcome instead of on the time spent to complete it
Project based pricing
This strategy uses production cost as its basis for pricing and, to this base cost, a profit level must be added in order to come up with the product price.
Cost-based pricing
Also known as customer-based pricing
Value-based pricing
A pricing concept which is defined as the setting of a product’s price based on the benefits it provides to consumers.
Value-based pricing
It consists of setting the price of a product based on what the competition is charging.
Competition-based
It defines your pricing setup for products and services, including your core price points plus discounts, offers, and strategy.
Pricing Structure
A pricing strategy in which a company or a retailer offers a single, uniform price for a product or service to all customers, regardless of the quantity purchased or the buyer’s demographics, such as income or location.
Single price strategy
A price difference between the cost and selling price of a product or service.
Markup Pricing
Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs
Segmented pricing
Different customers pay different prices for the same product or service
Customer-segment pricing
Different versions of the product are priced differently but not according to differences in their costs
Product-form pricing
A company charges different prices for different locations, even though the cost of offering at each location is the same.
Location-based pricing
A firm varies its price by the season, the month, the day, and even the hour.
Time pricing
The sum of the values that consumers exchange for the benefits of having or using the product or service.
Price
No demand above this price
Price ceiling
No profits below this price
Price floor
Offering just the right combination of quality and good service at a fair price.
Good-value pricing
Attaching value-added features and services to differentiate a company’s offers and to support charging higher prices.
Value-added pricing
Pricing that starts with an ideal selling price and then target costs that will ensure that the price is met.
Target costing
This market consists of many buyers and sellers trading in a uniform commodity.
Pure competition
This market consists of many buyers and sellers who trade over a range of prices rather than a single market price.
Monopolistic competition
This market consists of a few sellers who are highly sensitive to each other’s pricing and marketing strategies.
Oligopolistic competition
This market consists of one seller.
Pure monopoly
