Term
| Market Introduction Pricing |
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Definition
| the use of price skimming or penetration pricing when products are first launched inot the market |
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| intentionally setting prices at the top end of all competing products in order to promote an image of exclusivity and superior quality |
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| setting reasonably low prices, but still offering high quality products and adequate |
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| charging what is considered to be the "going rate" for the industry |
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| building a marketing program around factors other than price |
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| comparing the actual selling price to an internal or external reference price |
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| setting prices in odd numbers, rather than in whole, round numbers |
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| bringing together two or more complementary products for a single price |
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| reducing prices for certain intermediaries in the supply chain based on the functions that the intermediary performs |
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| giving buyers price breaks, including discounts for cash, quantity or bulk discounts, seasonal discounts, or trade allowances for participation in advertising or sales support programs |
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| quoting prices based on transportation costs or the distance between the seller and the buyer |
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| pricing that occurs when one unit in an organization sells products to another unit |
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| making full or partial payments in goods, services, or buying agreements rather than in cash |
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| charging different prices to different customers |
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| occurs when two or more competitors collaborate to set prices at an artificial level |
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| occurs when a firm sets prices for a product below the firm's variable cost with the intent of driving competition out of business or out of a specific market |
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| occurs when firms intentionally mislead customers with price promotions |
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Term
| Four key issues important in pricing strategy |
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Definition
| cost, demand, customer value, and competitors' prices |
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| Two key issues determine pricing strategy |
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Definition
| Perceived value and price sensitivity |
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| a customer's subjective evaluation of benefits relative to costs to determine the worth of a firm's product offering relative to other prodcut offerings |
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| refers to customers' responsiveness or sensitivity to changes in price |
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| an increase or decrease in price does not significantly affect the quantity demanded |
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| the quantity demanded is sensitive to price fluctuations, so a change in price will produce a change in demand and total revenue |
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| designed to maximize price relative to competitors' prices, the product's perceived value, the firm's cost structure, and production efficiency |
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| sets prices in order to maximize dollar or unit sales volume |
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| set prices in accordance with customer expectations and specific buying situations |
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| Designed to increase or maintain market share regardless of fluctuations in industry sales |
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| Designed to maximize the recovery of cash as quickly as possible |
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| Designed to match or beat competitors' prices |
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| Maintains current prices in an effort to sustain a position relative to the competition |
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