Term
| What is the danger of cutting prices? |
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Definition
- Cutting prices can lead to loss of profits and damaging price wars.
2. It can cheapen the brand and result in loss of brand value |
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Term
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Definition
Narrow: the amount of money charged for a product or service
Broad: Price is the sum of all the values that customers give up to gain the benefits of having or using a product or service. |
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Term
| What is the most important factor to understand to successfully utilise customer value-based pricing? |
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Definition
| understanding how much value customers place on the benefits they receive from the product and setting a price that captures this value. |
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Term
| Describe the value-based pricing process. |
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Definition
- Accesses customer needs and value perceptions
- Set target price based on customer perceptions of value
- Using the target value and prices, decide about the costs
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Term
| What are the two types of value-based pricing |
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Definition
- Good-value pricing
- value-and added pricing
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Term
| What is good-value pricing? |
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Definition
| Offering the right combination of quality and good service at fair price |
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Term
| What is the value-added pricing? |
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Definition
Opposite of setting low prices.
Rather than cutting prices, they attach value- added features and services to differentiate their offers and thus support higher prices |
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Term
| What is the difference between product mix and product line? |
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Definition
Product Mix = all the products that the company is offering for sale
Product line = a group of related products |
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