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3 Cards in this Set
- Front
- Back
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Terminology |
Competition Based Pricing a) Going Rate- Bases pricing largely on competitors prices. b) Sealed bid Pricing- Bases a price on a company perception of its competitors. New Product Pricing- a) Price skimming- Practice of setting an introductory price relatively high to attract buyers who are not concerned about price and to recover research and development costs. b) Penetration pricing- Practice of setting an introductory price relatively low to gain deep market penetration quickly. Price Adjustments: a) FOB origin pricing- Charges each customer its actual freight costs. b) Uniform delivered pricing- Charges the same price, inclusive of shipping, to all customers regardless location. c) Zone pricing- Sets differential freight charges for customers on the basis of their location. d) Basing point pricing-charges each customer the freight costs incurred from a specified curt to the destination, regardless of the actual point of origin of shippment. e) Freight-Absorption pricing- Seller absorbs all or part of the actual freight charges.
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Some multiple choices CAP 10- Pricing |
Remember ROI computation in the denominator in amount invested to include Working Capital. Quantity Discounts- Encourage large volume purchases. Seasonal Discounts- Are designed to smooth production by the selling firm. For example a ski manufacturer offers seasonal discounts to retailers in the spring and summer to encourage early ordering. Functional Discounts- Or trade discounts provides to channel members in return for the performance of certain function such as selling, storing and recordkeeping. |
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