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Pricing concepts > Pricing > Flashcards

Pricing Flashcards

1
Q

Price

Kotler et al.2008

A

The value that is placed on something

The sum of values that customers exchange for the benefits of having or using the product or service

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2
Q

Name 5 things about pricing

A

Key factor in producing revenue for the firm

Easiest of all marketing variables to change

Important consideration in competitve intelligence

Considered to be the only means of differentiation in highly commoditised markets

Among the most complex decisions in the marketing plan

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3
Q

What is the role of pricing? - sellers consider four key issues

A

Cost
Demand
Customer value
Competitors prices

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4
Q

Buyer’s perspective on pricing

A

Perceived value

Price sensitivty

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5
Q

When does the buyer’s market occur?

A

Large number of sellers in the market
Many substitutes for the product
Economy is weak

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6
Q

A sellers market occurs when:

A

Products are in short supply

Products are in high demand

Economy is strong

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7
Q

What are the key issues in pricing strategy

A

Pure competition
Monopolistic competition
Oligopoly
Monopoly

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8
Q

Price elasticity

A

Refers to customer’s sensitivity to changes in price

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9
Q

Inelastic demand

A

Customers are not sensitive to price changes

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10
Q

Elastic demand

A

Customers are sensitive to price changes

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11
Q

Unitary demand

A

Change in price and demand offset, so total revenue remains the same.

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12
Q

Situations that increase price sensitivty

A

Availability of product substitutes

Easy price comparions

Higher total expenditure

Noticeable Differenceces

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13
Q

Situtations that decrease price senstivity

A

Product Differentiation

Lack of substitutes

Real or perceived necessities

Perceived product benefits

Situational influcnes

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14
Q

Pure Competition

A

Agricultural product such as wheat

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15
Q

Monopolistic competition

A

Restaurants

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16
Q

Oligopoly

A

Petrol stations

17
Q

Monopoly

A

Railway

18
Q

Pricing: Legal and ethical issues

A

Predatory pricing
Price fixing
Price Discrimination
Deceptive Pricing

19
Q

Factors influcneing customer perception of price

A 
Financial 
Quality 
Functional 
personal 
Nature of purchase
20
Q

Internal influences on price

A

Costs
Organisational objectives
Marketing objectives

21
Q

Name 3 pricing objectives

A

Must be consistent with marketing

objectives are unique to the firm - reflect their environment

22
Q

ROI

A

Return on investment

23
Q

Name 5 pricing objectives

A 
ROI 
Target return on sales
Profit Maximisation
Cash flow 
break-even profits
24
Q

Name 3 sales oriented pricing objectives

A

Sales target
Sales Growth
Market share

25
Q

Name 3 competitor oriented pricing objectives

A

Meet
Avoid
Undercut

26
Q

External influences on price

A 
Competition 
Demand & Elasticity 
Channels of distribution 
customer and consumers 
Legal and regulatory
27
Q

How are companies currently matching competition?

A

Vouchers to match shopping values

Matching on-line prices

Interest makes price

matching easier

Agreeing requests by consumers within negotiations

Unit pricing makes it easier to compare different sizes of packaging

28
Q

Channels of distribution

A

Channels of distribution need to earn a profit by acting as intermediaries.

Suppliers to channels of distribution need to consider what is an appropriate margin for what they do

Conflict can arise because intermediaries are earning different amounts from the same supplier

29
Q

Value-based pricing

A

A reversal of the cost-based pricing approach

Focus is on the buyer’s perception of value, not the sellers cost

30
Q

Competition based pricing

A

Price is set based on competitor’s strategies, costs, prices and market offerings

31
Q

Price adjustments - Discount and allowance

A

Rewards based on time of payment, cash and volume.

Pricing concepts (1 decks)

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