3Rd Block 9.0 Vocab

Front 1

Cash discounts

Back 1

Discounts offered to buyers as an incentive for paying the invoice amount within a specified number of days.

Front 2

Competition

Back 2

A rivalry between businesses to attract scarce consumer dollars.

Front 3

Cost of merchandise sold

Back 3

The amount paid by a business for products purchased for resale or for use in the production of other goods.

Front 4

Cost-oriented pricing

Back 4

Implemented by carefully examining all of the costs associated with carrying a product and selling it to consumers then adding the desired profit to arrive at a selling price.

Front 5

Cost-plus pricing

Back 5

A pricing strategy that examines costs for individual products or services and adds a standard markup.

Front 6

Cumulative quantity discounts

Back 6

Based on a buyer’s total purchases during a specified period of time.

Front 7

Demand

Back 7

The number of products consumers are willing to buy at a given time and a given price.

Front 8

Demand oriented pricing

Back 8

Most effective when selling products with inelastic demand, this pricing strategy requires price planners to estimate the value customers place on products and set prices accordingly.

Front 9

Direct competition

Back 9

Competition between businesses that have similar formats and sell similar products.

Front 10

Elastic demand

Back 10

Demand that is sensitive to a change in price of the product.

Front 11

Fixed costs

Back 11

Costs that remain constant over a period of time regardless of sales volume.

Front 12

Fixed pricing

Back 12

(One-Price Policy) A policy under which an organization charges the same prices to all customers regardless of the quantity of the purchase.

Front 13

Indirect competition

Back 13

Competition between businesses that have dissimilar formats and sell dissimilar products.

Front 14

Inelastic demand

Back 14

Demand that is not sensitive to a change in price of the product.

Front 15

Loss leaders

Back 15

A product that is sold below costs in an effort to increase customer traffic.

Front 16

Markdowns

Back 16

Reductions in selling price used to stimulate sales, dispose of slow moving/discontinued merchandise, meet competitors’ prices, and/or increase customer traffic.

Front 17

Market price

Back 17

The price that prevails in the market for a particular good at a specific time.

Front 18

Markup pricing

Back 18

Pricing strategy that adds a predetermined percentage to the cost of products.

Front 19

Non-price Competition

Back 19

Competition based on factors other than price as a means to attract customers.

Front 20

Non-cumulative quantity discounts

Back 20

Reductions given to buyers for a one-time purchase or shipment.

Front 21

Odd/even cent pricing

Back 21

Psychological pricing technique based on the principle that prices ending in odd numbers ($5.99) communicate a bargain and prices ending in even numbers ($6.00) communicate quality.

Front 22

Opportunity cost

Back 22

The opportunity cost is the option that is given up when a consumer chooses one product/service over another.

Front 23

Penetration pricing

Back 23

Setting a low price when introducing a product into a competitive market to motivate customers to purchase.

Front 24

Prestige pricing

Back 24

Pricing technique that sets a higher-than-average price for products in order to communicate quality and status.

Front 25

Price

Back 25

The amount charged to customers in exchange for goods and services.

Front 26

Price Competition

Back 26

Competition that uses price as the primary means to attract customers.

Front 27

Price lining

Back 27

Establishing price points between products in a product line to communicate differences in quality and/or service to consumers.

Front 28

Profit

Back 28

Revenue remaining after the expenses of running the business have been deducted from income.

Front 29

Promotional pricing

Back 29

Selling a product at a temporarily lower price in order to attract customers.

Front 30

Psychological pricing

Back 30

Pricing technique based on the belief that customers form their perceptions of products on price and these perceptions affect customer buying decisions.

Front 31

Quantity discounts

Back 31

Reduction in price given by manufacturers/ wholesalers when a large or specified quantity is purchased.

Front 32

Skimming pricing

Back 32

: Setting a high price when introducing a product that has little competition and will appeal to customers who like to be the first to have the latest products.

Front 33

Supply

Back 33

The number of products manufacturers are willing to produce at a given time and at a given price.

Front 34

Trade discounts

Back 34

(Functional discounts) Discounts offered to channel members for performing certain functions like storing or record keeping.

Front 35

Unit pricing

Back 35

Stating the price of a product per unit of standard measure.

Front 36

Variable costs

Back 36

Costs that vary based on sales volume or changes in business needs.

Front 37

Variable pricing

Back 37

(Flexible-Price Policy) Pricing technique that encourages customers to bargain with sellers in an effort to obtain the best price for products and services.