Term
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Definition
| the amount of money charged for a product or service. |
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Term
| 3 major pricing strategies |
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Definition
1. customer value-based pricing
) 2. cost-based pricing
) 3. competition-based pricing |
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Definition
| offering just the right combination of quality and good service at a fair price |
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Definition
| adding value features and charging more. |
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Term
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Definition
| Your COST OF GOODS, costs to produce your product and service, shipping your product to the store |
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Term
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Definition
| The market demand, popularity of your product, the economy, your competition, the season. |
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Term
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Definition
| setting the price based on the cost of producing, distributing and selling the product plus a fair rate of return for effort and risk. |
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Term
| competition- based pricing |
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Definition
| setting prices based on competitors strategies, cost, and market offerings. |
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Term
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Definition
| adding a standard markup to the cost of the product. |
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Term
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Definition
| setting price to break even on the costs of making and marketing as product, or setting price to make a target return. |
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Definition
| a measure of the sensetivity of demand to change in price. |
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Term
| New Product Pricing Strategies |
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Definition
1.Market-skimming pricing (price skimming)
• Setting a high price to skim maximum revenues layer by layer from the segments willing to pay the high price
-quality & image must support the high price
-large amount of buyer
-not easy to enter the market
2.Market-penetration pricing
Setting a low price to attract a large number of buyers and a large market share.
-must be high price sensitive market
-low production cost
-low competition |
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Term
| How do companies find a set of prices that maximizes their profits? |
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Definition
through total product mix.
-product line pricing
-optional pricing
-captive-product pricing
-by-product pricing
-product bundling |
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Term
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Definition
| setting the price steps between various products in a product line based cost differences between the products. |
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Term
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Definition
| pricing optional or accessory products sold with the main product |
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Term
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Definition
pricing products that must be used with the main product
example: games for video games |
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Term
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Definition
pricing low-valued by-products to get rid of or make money on them
using all the products even the waste |
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Definition
| pricing bundles of products sold together |
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Definition
| a straight reduction in price on purchases during a stated period of time or in large quantities |
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Term
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Definition
| promotional money paid by manufactures to retailers in return for an agreement to feature the manufactures product in some way |
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Term
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Definition
Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs
ex: economy vs first class flight |
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Term
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Definition
Considers the psychology of prices and not
simply the economics
example: higher the price better the quality |
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Term
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Definition
prices that buyers carry in their minds and refer to when they look at a given product.
ex:buying candy one year at $1 and then this year buying it at $3. |
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Term
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Definition
the temporarily pricing products below the list price, and sometimes even below cost to increase short run sales.
example: black Friday sales. |
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Definition
adjusting prices continually to meet the characteristics and needs of individual customers and situations.
ex: sports game. Championship winners ticket prices increase. |
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Term
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Definition
• Excess capacity • Falling demand due to strong price competition
or a weakened economy
• Attempt to dominate the market |
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Term
| Reasons for price increases: |
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Definition
• Cost inflation
• Over-demand |
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