Test 3 Flashcards
Product-line pricing
Setting of prices for all items in a product line to compare line, not each item
Skimming pricing
Highest initial price that customers desiring product are willing to pay when introducing new/innov product
Above-, at-, below- market pricing
Setting mkt price for a product or product class based on a subjective feel for the comp. price or mkt price as benchmark
Basing-points
Selecting 1+ geographical location (basing pt) from which list price for product plus freight expenses charges to buyers
Customary pricing
Price dictated by tradition, standardized channel of distribution, or other comp. factors
EDLP (everyday low prices)
Replacing promo allowances with lower Manu list prices
Experience curve pricing
Based on learning effect, holds that unit cost of many products and services declines by 10-30% each time a firms experience at producing and selling them doubles
Flexible pricing
Setting price depending on individual buyers/purchase situation (dynamic pricing)
FOB origin
“Free on board” price the seller quotes that includes only the cost of loading product onto vehicle and specifies the name of location where loading occurs (factory or warehouse)
Loss-leader
Ex: printer and printer ink
Penetration pricing
Low initial price on a new product to appeal to mass mkt
Predatory
Illegal, low price to drive out comp and then raise back price
Price fixing
Illegal, conspiracy among firms to set prices for product
Promo allowances
Cash payments or an extra amount of “free goods” awarded sellers in the mktg channel for undertaking certain advantages or selling activities to promote product
St. Markup
Adding fixed % to cost of all items
