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10 Cards in this Set
- Front
- Back
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Cost-plus pricing
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adding a fixed mark up for profit to the unit price of a product
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Marginal-cost pricing
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basing the cost on the extra cost of making one additional unit of output
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Contribution-cost pricing
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setting prices based on the variable costs of making a product in order to make a contribution towards fixed costs and profit
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Full-cost/absorption-cost pricing
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setting a price by calculating a unit cost for the product (allocated fixed and variable costs) and then adding a fixed profit mark-up
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Competition-based pricing
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a firm will base its price upon the price set by its competitors
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Price leadership
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one dominant firm in a market sets the price and other firms simply charge a price based upon that set by the market leader
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Predatory pricing
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deliberately undercutting competitor’s prices in order to try to force them out of the market
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Going-rate pricing
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the price is charged based upon a study of the conditions that prevail in a certain market and the prices charged by major competitors
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Penetration pricing
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setting a relatively low price often supported by strong promotion in order to achieve a high volume of sales
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Market skimming
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setting a high price for a new product when a firm has a unique or highly differentiated with low price elasticity of demand
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