week 5 Flashcards
value that is exchanged for products or services in a marketing transaction
price
how to determine your price?
cost of products including shipping and handling costs
consumer interpretation of prices (3)
- value consciousness
- price consciousness
- price sensitivity
concerned about price and quality of product
value conscious
striving to pay low prices
price conscious
drawn to products that signify prominence and status
prestige sensitive
adding a predetermined percentage or mark on to the product cost to arrive at a selling price for each product
cost plus approach
assesses the competitive conditions and then makes a judgmental determination of what you should charge for the product
competition based pricing
methods of pricing (6)
- cost plus approach
- competition based pricing
- penetration pricing
- economy pricing
- package pricing
- psychological pricing
setting an initial low price at the beginning of your business in hopes of attracting customers. prices will rise as you gain more market share
penetration pricing
this is a no frills low price. often called discounters
economy pricing
service and merchandise are packaged at a set price. consumers like the ease of purchasing packages. complies with FTC requirements
package pricing
strategy where merchandise price ends in an odd number (5,7 or 9) consumers perceive it to be a fairer price
psychological pricing
pricing strategies (3)
- customer value based pricing
- cost based pricing
- competition based pricing
setting prices based up the buyers perceived value
customer value based pricing
pricing based on the cost of producing, distributing, and selling the product plus a fair rate of return for effort and risk
cost based pricing
setting prices based on the competitors strategies, prices, costs, and market offerings
competition based pricing
price determination (4)
- fixed multiple or times factor
- graduated recovery
- declining pricing
- modified declining
mark up is multiple by a constant factor
-same mark up to all units
fixed multiple or times factor
a method of price quotation which creates one total price package for both service and merchandise
unit pricing
a method of price quotation showing separately the price of the services and the price of the casket
bi-unit pricing
a method of price quotation “Y” which the charges are broken down into several component parts, such as professional services, facitlites, automotive equipment and merchandise
functional pricing
the method of price quotation by which each unit of service and/or merchandise is priced separately GPL
itemization
