price Flashcards
what is cost plus pricing
adding a percentage (mark-up) to the product’s cost to set the price
what is a mark-up
percentage added to the cost that ensures profit
what is penetration pricing
starting with a low price to attract consumers and raising it once established
what is competition-based pricing
setting prices based on rival businesses’ prices
what is predatory pricing
setting prices low to drive rivals out of the market
what is skimming pricing
starting with a high price and lowering it as competition increases
what are loss leaders
products sold below cost to attract consumers to the business
what factors affect pricing
marketing mix, business objectives, taxes, competition
why is price important in the marketing mix
consumers seek good quality for reasonable prices
what are the benefits of cost plus pricing
ensures a profit for each product sold
what is promotional pricing
temporarily lowering prices to attract consumers
what are the forms of promotional pricing
discounts and sales, psychological pricing
what is psychological pricing
setting prices just below round numbers to make them appear cheaper
