Pricing Flashcards
What is Cost-plus pricing?
When a fixed percentage is added to the cost to produce the product to make the price. This allows all of the costs of production to be covered with every product.
What is Competition pricing?
When a business sets the prices of their products according to their competition’s.
What is Penetration pricing?
When a new product enters the market, they charge a lower price to gain market share, then raising the price later.
What is Skimming pricing?
When a new product is sold, the price is deliberately high, since many customers want the product now, regardless of the price. Afterward, the price is gradually lowered. Apple does this strategy with the release of every new iPhone.
What is Promotional pricing?
When a company lowers the regular price of a product for a limited time to entice people to buy the product.
What is a Pricing Algorithm?
A computer program that autonomously adjusts prices based on current or past data, related to demand, cost, or rival prices.
