Term
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Definition
| set prices to allow for an 8% profit margin on all goods sold |
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Term
| Sales or market share objectives |
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Definition
| develop bundle pricing offers to increase market share |
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Term
| Competitive effect objectives |
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Definition
| alter pricing strategy during first quarter of the year to increase sales during competitor’s intro of new product. |
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Term
| Customer satisfaction objectives |
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Definition
| alter price to match customer expectations |
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Term
| Image enhancement objectives |
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Definition
| alter pricing policies to reflect the increased emphasis on product’s quality image |
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Term
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Definition
| customers’ desire for a product. |
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Term
| Elements of Price Planning |
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Definition
1) set price objectives
2) estimate deamnd |
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Term
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Definition
| a shift is change in direction or position |
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Term
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Definition
| the % change in unit sales that results from a % change in price. |
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Term
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Definition
| when changes in price have large effects on the amount demanded. |
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Term
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Definition
| when changes in price have little or no effect on amount demanded |
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Term
| Cross-Elasticity of demand |
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Definition
| changes in price of other products may affect a product’s demand |
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Term
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Definition
| to ensure that product price will cover costs, marketers must determine Variable costs and Fixed costs |
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Term
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Definition
| per-unit costs that fluctuate depending on how many units a firm produces |
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Term
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Definition
| costs that do not vary with the number of units produced. |
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Term
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Definition
| pricing through the channel |
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Term
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Definition
| an amount added to the cost of the product to create a price at which the channel member will sell the product. (Gross, Retailer, Wholesaler) Margin. |
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Term
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Definition
| firm base selling price on est. of volume it can sell in different markets at different prices |
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Term
| Price Strategies based on competition |
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Definition
| price leadership strategy |
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Term
| Price strategy based on customer needs |
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Definition
| value or (EDLP) every day low prices |
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Term
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Definition
| new products present unique pricing challenges |
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Term
| Pricing Strategies based on cost |
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Definition
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Term
| Pricing Strategies based on new product |
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Definition
| skimming, penetration, and trail pricing |
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Term
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Definition
| practice of charging different prices to different market segments for same product. |
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Term
Develop Pricing Tactics
Pricing for individual products |
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Definition
| Two part pricing/Payment pricing/Decoy pricing |
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Term
Develop Pricing Tactics
Pricing for multiple products |
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Definition
| Price bundling/Captive pricing |
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Term
Develop Pricing Tactics
Distribution-based pricing |
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Definition
free on board origin pricing
free on board delivered pricing |
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Term
| F.O.B. (free on board) origin pricing |
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Definition
| customer must pay the cost of shipping the items from the factory to the customer’s location |
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Term
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Definition
| seller pays both the cost of the loading and the cost of transporting the goods to the customer. |
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Term
| Discounting for Channel Members |
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Definition
tactics include:
trade discounts
quantity discounts
cash discounts
seasonal discounts |
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Term
Psychological issues in Setting Prices:
buyers form expectations |
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Definition
| expectations of what is fair or customary prices for goods or services |
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Term
| internal reference prices |
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Definition
| set price or range consumers have in mind when evaluating a product’s price |
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Term
| price- quality inferences |
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Definition
| when consumers use price as a cue to infer product quality |
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Term
Legal and Ethical Considerations in B2C pricing
Bait and switch |
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Definition
| adverse very low-priced item to lure customers to store |
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Term
Legal and Ethical Considerations in B2C pricing
Loss-leader pricing |
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Definition
| use low price to get customer into store, but make up “loss” through sale of other products |
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Term
Legal Issues in B2B Pricing:
illegal B2B price discrimination |
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Definition
| firms sell products at different prices in a way that “lessens competition” |
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Term
Legal Issues in B2B Pricing:
Price-fixing |
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Definition
| two or more companies conspire to keep prices at certain level |
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Term
Legal Issues in B2B Pricing:
Predatory pricing |
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Definition
| firm sets very low price for purpose of driving rival out of business |
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Term
| why do marketers want to see and understand demand curves |
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Definition
| they are primarliy used to show the number of units the market will buy in a given time period, at different prices that might be charged. |
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Term
| what is loss-leader pricing |
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Definition
| the pricing policy of setting very low or even below cost to attract customers into a store |
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Term
| when a profit objective us used to determine pricing strategy |
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Definition
| the focus is on a target level of profit growth or a desired net profit margin |
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Term
| which of the following describes elastic demand for a product |
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Definition
| when customers are sensitive to changes in prices, and a change in price results in a substantial change in demand |
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Term
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Definition
| is a pricing strategy in which the price of a product is raised as demand for that product goes up and lowered as demand goes down |
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Term
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Definition
| is primarily used to show the quantity of a product that customers will buy in a given time period, at diff prices that might be charged |
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Term
| the 6th and final step in the price planning process |
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Definition
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Term
| choosing pricing strategy |
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Definition
| the fifth step in price planning process |
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Term
| the forth step in price planning process |
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Definition
| is examine the pricing environment |
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Term
| the third step in the price planning process |
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Definition
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Term
| what are average fixed cost |
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Definition
| the fixed cost per unit produced |
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Term
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Definition
| pricing method of setting prices in which the seller totals all the costs for the product and then adds an amount to arrive at the selling price |
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