Pricing Considerations & Strategies Flashcards
Break-even Pricing
Setting price to break even on the costs of making and marketing a product, or setting the price to make a target return
Cost-plus Pricing
Adding a standard markup to the cost of the product
Demand Curve
A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged
Price Elasticity
A measure of the sensitivity of demand to changes in price
Captive Product Pricing
Setting a price for products that must be used along with a main product, such as blades for a razor and games for a video game console
Market Skimming Pricing
Setting a high price for a new product to skim maximum revenue layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales
Market Penetration Pricing
Setting a low price for a new product to attract a large number of buyers and a large market share
Allowance
A reduction from the list price for buyer actions such as trade-ins or promotional and sales support
Segmented Pricing
Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs
Reference Pricing
Prices that buyers carry in their minds and refer to when they look at a given product
Channel Conflict
Disagreements among marketing channel members on goals, roles, and rewards- who should do what and for what rewards.
Disintermediation
The cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries
Intensive Distribution
Stocking the product in as many outlets as possible
Exclusive Distribution
Giving a limited number of dealers the exclusive right to distribute the company’s products in their territories
Selective distribution
The use of more than one but fewer than all of the intermediaries who are willing to carry the company’s products
Channel level
A layer of intermediaries that performs some work in bringing the product and it’s ownership closer to the final layer
Channel conflict
Disagreements am of marketing channel members on goals, roles, and rewards-who should do what and for what rewards
Vertical marketing system
A channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate
Franchise
A contractual vertical marketing system in which a channel member, called a franchiser, links several stages in the production-distribution process
Horizontal marketing system
A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity
Supply chain management
Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers
Intermodal transportation
Combining two or more modes of transportation
Third party logistics provider
An independent logistics provider that performs any or all of the functions required to get a clients product to market
Oligopolistic competition
Few sellers who are sensitive to each other’s pricing/marketing strategies
Monopolistic competition
Many buyers and sellers who trade over a range of prices
Monopoly
Single seller
Loss-leader
Strategy in which a business offers a product or service at a price that isn’t profitable to get new customers
Predatory Pricing
Setting low prices to eliminate the competition
Rebate
a partial refund to the customer
Merchandising
The planning and promotion of sales by presenting a product to the right market at the right time, by carrying out organized, skillful advertising and using attractive displays
Slotting Fee
Sum paid by a manufacturer to a retail chain for making room for a product on it’s shelves
