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21 Cards in this Set
- Front
- Back
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Break-even Pricing (Target Profit Pricing)
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setting prices to break even on the costs of making/marketing the product
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Cost-based Pricing
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setting prices based on costs for producing, distributing, selling product plus a fair rate of return for effort/risk
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Cost-plus Pricing
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adding a standard markup to cost of product
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Demand Curve
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shows number of units the market will buy in given time period, at different prices that might be charged
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Experience Curve (learning curve)
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drop in average per-unit production cost that comes with accumulated production experience
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Fixed Costs (Overhead)
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do not vary with production or sales level
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Good-value Pricing
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offering just the right combo of quality and good service at a fair price
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Price Elasticity
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measure of sensitivity of demand to change in price
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Target Costing
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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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Total Costs
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sum of the fixed an variable costs for any given level of production
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Value-added Pricing
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attaching features and services to differentiate company's offers and support charging higher prices
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Variable Costs
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costs that vary directly with level of production
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Customer Perception of Value
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when pricing products, understand how much value customers place on the benefits receive from the product then capture that value when setting the price
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Price Floor
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Company Cost for making product
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Price Cieling
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Customer perceived value of product benefits
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Cost-based Pricing
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Product Driven
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Value-based Pricing
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Customer Driven
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Markup Price Formula
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markup price=unit cost/(1-desired rate of return)
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Unit Cost Formula
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unit cost=variable cost + (fixed costs/unit sales)
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Break-even Volume Formula
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fixed cost/price variable cost
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Price-elasticity of Demand Formula
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%change in quantity demand/%change in price
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