Pricing Flashcards
Penetration Pricing
Initially set low to rapidly reach a wide market and get the word spread of the product - goal is to switch customers to this product bc of lower price
Price Skimming
Setting a new product high and lowering them as competitors enter the market
-opposite of penetration
Early adopter
Someone who uses a new innovation before most of the population
-they lead the way into wider adoption to reach mainstream
Price leadership/price taking
Strategy of setting prices much lower than those of the competition
Predatory Pricing
Illegal business practice of setting prices for a product extremely low to eliminate competition
Premium Pricing
Keeping one of the products way higher in order to get favourable perceptions among buyers
Seasonal pricing
Raising prices in peak seasons and lowering them in slow ones
Loss leaders
Intentionally selling a product bellow its market cost to attract customers
Psychological Pricing
The theory that certain prices have psychological impact e.g. expressing prices as “just-bellow” numbers
Discrimination Pricing
Charging customers different prices for the same product based on what the seller thinks the customer will agree to
Cost-plus pricing
Adding a specific percentage to the unit cost of the product for the selling price
Mark up
Adding a certain amount to the cost of goods to cover overhead and profit
Price takers
Its own transactions being unable to affect the market price
Price maker
A company that can dictate the price it charges
Dynamic pricing
Changing price depending on when or how much the consumer wants to buy it
