TEST 5 Flashcards
The price tactic that tries to get consumers into a store through false or misleading price advertisement and then uses high pressure selling to persuade consumers to buy more expensive merchandise.
Bait Pricing
Setting prices for an entire LINE of Products
Product Line Pricing
The process during which both the sales person and the prospect offer special concessions in an attempt to arrive at a sales agreement.
Negotiation
A price tactic that uses odd numbered prices to connote bargains and even numbered prices to imply quality.
Odd-Even Pricing
A method of determining what sales volume must be reached before total revenue equals total costs.
Break-even Analysis
The practice of marking up prices by 100% or doubling the cost.
Keystoning
A companies product sales as a % of total sales for that industry.
Market Share
The price at which demand and supply are equal.
Price Equilibrium
Areas of a business in which customers have contact with the company and data may be gathered.
Touch Point
A method of setting prices that occurs when marginal revenue equals marginal cost. MR=MC
Ex: Apple lowering price of iPhone
Profit Maximization
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
The cost of buying the products from the producer plus amounts for profit and for expenses not otherwise accounted for
Markup Pricing
Net profit AFTER taxes divided by total assets.
Net Profit/Total Assets
Return on Investment (ROI)
Modification of uniform delivered pricing that divides the U.S (or the total market) into segments or zones and charges a flat freight rate to all customers in a given zone.
Zone Pricing
Price tactic that requires the buyer to absorb the freight costs from the shipping point. “Free on Board”
FOB Origin Pricing
A discount to WHOLESALERS and retailers for performing channel functions. Steady production year round.
Functional Discount
Marketing two or more products in a single package for a special price. Ex: cable+internet
Price Bundling
Revenue - Expenses
Profit
The set of steps a salesperson goes through in a particular organization to sell a particular product or service.
Sales Process (sales cycle)
The change in total costs associated with a one-unit change in output. Marginal=1
Marginal Cost (MC)
A price reduction offered to buyers buying in MULTIPLE units or above a specific dollar amount.
Quantity Discount
Price reduction for buying merchandise out of season.
Seasonal Discount
The extra REVENUE associated with selling an extra unit of output or the change in total revenue with one unit change in output.
Marginal Revenue (MR)
A statement of the salesperson sales goals, usually based on sales volume.
Quota
A pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the mass market.
Penetration Pricing
A situation in which total revenue remains the same when prices change.
Unitary Elasticity
A situation in which consumer demand is sensitive to changes in price
Elastic Demand
The practice of charging very low prices for a product with the intent of driving competition out of the business or market.
Predatory Pricing
A price tactic in which the seller pays all or part of the actual freight changes and does not pass them onto the buyer
Freight Absorption Pricing
A pricing objective that maintains existing prices or meets the competitors prices. Ex: Wal-Mart
Status Quo Pricing
Price tactic in which the seller pays the actual freight charges and bills every purchaser an identical, flat freight charge.
Uniform Delivered Pricing
A payment to a dealer for promoting the manufacturers products.
Promotional Allowance
A pricing policy whereby the form changes a high introductory price often coupled with heavy promotion
Price Skimming
A technique for adjusting prices that uses complex mathematical software to probably fill unused capacity by discounting early purchases, limiting early sales all these discounted prices and overbooking capacity
Yield Management System (YMS)
The price charged to customers multiply by the number of units sold. Price X #units sold.
Revenue
A sales practice that involves building, maintaining and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships.
Relationship Building (consultive)
Practice of offering a product line with several items at specific price points.
Price Linning
