Setting the right price Flashcards
basic, long-term pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle
Price Strategy
price policy whereby a firm charges a high introductory price, often coupled with heavy promotion
Price Skimming
A pricing policy whereby a firm charges a relatively low price for a product when it is first rolled out as a way to reach the mass market
Penetration Pricing
Charging a price identical to or very close to the competition’s price
Status Quo Pricing
Laws that prohibit wholesalers and retailers from selling below cost
Unfair Trade Practice Acts
An agreement between two or more firms on the price they will charge for a product
Price Fixing
he practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market
Predatory Pricing
The general price level at which the company expects to sell the good or service
Base Price
A price reduction offered to buyers buying in multiple units or above a specified dollar amount
Quantity Discount
A deduction from list price that applies to the buyer’s total purchases made during a specific period
Cumulative Quantity Discount
A deduction from list price that applies to a single order rather than to the total volume of orders placed during a certain period
Non-Cumulative Quantity Discount
A basic, long-term pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle
Price Strategy
A price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill
Areveal answer
How well did you know this?
Cash Discount
A discount to wholesalers and retailers for performing channel functions
Functional Discount (Trade Discount)
A price reduction for buying merchandise out of season
Seasonal Discount
A payment to a dealer for promoting the manufacturer’s products
Promotional Allowance (Trade Allowance)
A cash refund given for the purchase of a product during a specific period
Rebate
Setting the price at a level that seems to the customer to be a good price compared to the prices of other options
Value-Based Pricing
A price tactic that requires the buyer to absorb the fright costs from the shipping point (“free on board”)
FOB Origin Pricing
A price tactic in which the seller pays the actual freight charges and bills every purchaser an identical, flat freight charge
Uniform Delivered Pricing
A modification of uniform delivered pricing that divides the United States (or the total market) into segments or zones and charges a flat freight rate to all customers in a given zone
Zone Pricing
A price tactic in which the seller pays all or part of the actual freight charges and does not pass them on to the buyer
Freight Absorption Pricing
A price tactic that charges freight from a given (basing) point, regardless of the city from which the goods are shipped
Basing-Point Pricing
A price tactic that offers all goods and services at the same price (or perhaps two or three prices)
Single-Price Tactic
A price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities
Flexible Pricing (Variable Pricing)
The practice of offering a product line with several items at specific price points
Price Lining
A price tactic in which a product is sold near or even below cost in the hope that shoppers will buy other items once they are in the store
Leader Pricing (Loss-Leader Pricing)
A price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high-pressure selling to persuade consumers to buy more expensive merchandise
Bait Pricing
A price tactic that uses odd-numbered prices to connote bargains and even-numbered prices to imply quality
Odd-Even Pricing (Psychological Pricing)
Marketing two or more products in a single package for a special price
Price Bundling
educing the bundle of services that comes with the basic product
Unbundling
A price tactic that charges two separate amounts to consumer a single good or service
Two-Part Pricing
An extra fee paid by the consumer for violating the terms of the purchase agreement
Consumer Penalty
Setting prices for an entire line of products
Product Line Pricing
A cost that is shared in the manufacturing and marketing of several products in a product line
Joint Cost
A price tactic used for industrial installations and many accessory items in which a firm price is not set until the item is either finished or delivered
Delayed-Quotation Pricing
A price tactic in which the final selling price reflects cost increases incurred between the time the order is placed and the time delivery is made
Escalator Pricing
