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MKT > Price > Flashcards

Price Flashcards

1
Q

price ratio

A

resources given up / goods received (eg: paying 6 for 12 doughnuts makes then 0.50 each)

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2
Q

ways to change price

A

sticker price, quantity, quality, terms

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3
Q

price change: sticker price

A

adjust the direct monetary cost

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4
Q

price change: quantity

A

reduce the amount of product (smaller candy bars at same price)

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5
Q

price change: quality

A

using cheaper ingredients or materials (eg: replacing chocolate with fillers)

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6
Q

price change: terms

A

modify conditions like delivery fees or support services

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7
Q

marketer perspective on price & customer reaction

A

recognizes that consumers have imperfect information. infers quality from price and rely on price cues.

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8
Q

economist perspective on price and customer reaction

A

assumes consumers have perfect info. demand is price sensitive, so higher-prices generally decrease quantity demanded

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9
Q

pricing: role of cost

A

cost influences pricing decisions but does not fully dictate customer-percieved value (ignores demand and competitor pricing)

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10
Q

price discrimination

A

charging different prices to different customer groups based on willingness to pay

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11
Q

price discrimination: explicit

A

requires customers to meet specific criteria (eg: student discounts, senior citizen discounts)

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12
Q

price discrimination: implicit

A

creates conditions that appeal only to certain groups

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13
Q

two methods of pricing new products

A

skimming and penetration

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14
Q

pricing new products: skimming

A

set high introductory price to maximize margins from price-insensitive customers > causes vulnerability to competition (works when one firm has short-term monopoly)

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15
Q

pricing new products: penetration

A

set low introductory price to gain market share quickly and discourage competitors

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16
Q

pricing approach: everyday low pricing

A

consistent low prices with minimal discounts

17
Q

pricing approach: high-low pricing

A

higher regular prices offset by periodic discounts

18
Q

cost-plus pricing

A

price of product determined by adding a fixed percentage to total cost of product or service

19
Q

problems with cost-plus pricing

A

ignores market demand, customer perception of value, and competitor pricing (can lead to price that are either too high or too low)

20
Q

pricing legal issues: price discrimination

A

illegal among competing firms unless cost savings justify differences

21
Q

pricing legal issues: collusion

A

illegal agreement between competitors to fix pricesi

22
Q

pricing legal issues: predation

A

temporarily pricing below cost to drive out competitors, then raising prices

23
Q

pricing legal issues: tying

A

forcing customers to buy a less popular product to access a desired one

24
Q

pricing legal issues: price bundling

A

legal practice of offering complementary items at a combined lower price

25
Q

interbrand pricing competition

A

between different brands (aka nike v addida

26
Q

intrabrand pricing competition

A

among retailers selling the same brand (aka nike shoes at different stores)

27
Q

price introductory effects

A

introducing a product at a low price can create perception that it’s a low-cost brand, making it harder to raise prices later (higher intro prices give the brand a premium image)

28
Q

consumer price awareness

A

consumers that spend minimal time comparing prices makes it easier for retailers to utilize prominent discounts as a pricing strategy

29
Q

internal reference price

A

based on memory and past experiences (expectation that milk is $3)

30
Q

external reference price

A

influences by marketing cues

31
Q

promotion signal

A

sale signs can increase sales by being perceived as an indicator of a good deal

32
Q

odd-even pricing

A

prices ending in .99 or .95 is perceived as lower than rounded prices

33
Q

category management

A

focus on optimizing products within a product category by analyzing the impact of pricing and promotions on substitute products

MKT (7 decks)

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