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| The amount of money charged for a product or service, or the sum of all the values that customers give up in order to gain the benefits of having or using a product or service |
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| Setting a price based on buyers' perceptions of value rather than on the seller's cost. |
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| Offering just the right combination of quality and good service at a fair price |
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| Attaching value-added features and services to differentiate a market offering and support higher prices, rather than cutting prices to match competitors |
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| Setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for its effort and risk |
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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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| Adding a standard markup to the cost of the product |
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| Break-Even Pricing (Target Profit Pricing) |
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Definition
| Setting price to break even on the costs of making and marketing a product; or setting price to make a target profit |
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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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| A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged. |
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| A measure of the sensitivity of demand to changes in price |
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| Market-Skimming Pricing (Price Skimming) |
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Definition
| Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales |
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| Market-Penetration Pricing |
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Definition
| Setting a low price for a new product in order to attract a large number of buyers and a large market share |
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| Setting the price steps between products in a product line based on cost differences and customer perceptions of the value |
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| The pricing of optional or accessory products along with a main product |
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| Setting a price for products that must be used along with a main product |
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| Setting a price for by-products in order to make the main product's price more competitive |
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| Combining several products and offering the bundle at a reduced price |
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| A straight reduction in price on purchases under stated conditions or during a stated period of time |
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| Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way |
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| Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs |
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| A pricing approach that considers the psychology of prices and not simply the economics; the price is used to say something about the product |
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| Prices that buyers carry in their minds and refer to when they look at a given product |
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| Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales |
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| Setting price based on the buyer's geographic location |
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| Adjusting prices continually to meet the characteristics and needs of individual customers and situations |
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