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| The amount of money charged for a product or service, or the sum of the values that consumers exhange for the benefits of having or using the product or service. |
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| Charging different prices sepends on individual customer and situations. (kind of like ebay, where you will only pay what you think its worth) |
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| Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met. |
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| Costs that do not vary with production or sales level |
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| Costs that vary directly with the level of production |
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| The sum of the fixed and variable costs for any given level of production |
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| Experience Curve (learning curve) |
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| The drop in the average pre-unit production cost that comes with accumulated production experience. |
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A curve that shows the number of units that market will buy in a given time period, at different prices that might be charged.
Elastic V. inelastic |
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A measure of the sensitivity of demand to changes in price.
= % in quantity demanded / % change in price |
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Adding a standard mark up to the cost of the product.
(Odell said that a contract that is Cost plus is a contract allowing someone to rape you.) ANYamount + 10% |
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Break-even pricing
(target profit pricing) |
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| Setting price to break even on the cost of making and marketing a product; or setting a price to make a target profit. |
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| Know the difference between Cost-based and Value-Based pricing. |
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| Setting price based on buyers' preceptions of value rather than on the sellers cost. |
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| Offering just the right combination of quality and good service at a fair price. |
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| Competition-based pricing |
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| Setting priced based on the priced that competitor charge for similar products. |
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