Module G (b): Additional Pricing Strategies Flashcards
Which 2 strategies can be used to introduce a product into a market?
- Market-skimming pricing
- Market-penetration pricing
What is market-skimming pricing?
A strategy with high initial prices to ‘skim’ revenue layers from the market - when a new product is introduced the set price is high to take advantage of the highest prices that can be achieved from the beginning.
What is market-penetration pricing?
It sets a low price for a new product to attract a large number of buyer quickly to win over a large market share.
What is a product mix?
The total number of product lines that a seller offers in the market to its buyers
What are the 5 product mix strategies?
- Product Line Pricing
- Optional Product Pricing
- Captive Product Pricing
- By-Product Pricing
- Product-Bundle Pricing
What is product line pricing?
A price is set for multiple products that a company offers in coordination with one another
What is option product pricing?
This strategy takes into account optional or accessory products along with the main product
What is captive product pricing?
It involves products that must be used along with the main product
What is by-product pricing?
Refers to products with little or no value produced as a result of the main product. Producers will seek little to no profit other than the cost to cover storage and delivery.
What is product Bundle Pricing?
It combines several products at a reduced price
What are the 7 different price adjustment strategies?
- Discount and allowance pricing
- Segmented pricing
- Psychological pricing
- Promotional pricing
- Geographical pricing
- Dynamic pricing
- International pricing
