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31 Cards in this Set
- Front
- Back
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demand oriented approach
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pay attention to the customers demand and tastes. underlying factors for the demand of the product
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skimming price
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introduce product at high intial price. customers not price sensitive and interpret high prices as better product
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penetration pricing
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introducing at low price. to discourage compeitors, price sensitive to customer segments, enables company to capture market share and take advantage of economies scale
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bundle pricing
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pricing of 2 or more products in a single package
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yield management pricing
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airlines do this. charging of different prices to maxmaize revenue for a set amount of capacity at any given time
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standard mark-up pricing
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add fixed % to cost of all itmes in specific class. supermarkets with products.
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cost plus pricing
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constuction pricing. add specific amount to final product to get final price
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experience curve pricing
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price lowered as firm makes and sells more of a product and costs decline
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target profit pricing
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pricing so that a firm reaches a specific $ volume of profit per year
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one price policy(fixed pricing)
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setting one price for all customers
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flexible price policy
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setting different prices for different customers
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types of discounts (4)
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1.quantity discounts-encourage to buy more
2.seasonal discounts-buy stuff earlier than nomral 3.trade(functional) discounts-offered to resellers to market functions they use in future 4.cash discounts-retailers to pay bills more quickly |
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FOB (free on board) pricing
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-title to the products passes to the buyer when the product is loaded onto the truck at origin
-title = respsonsibility for shipping costs and damages that occur during shipping |
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uniform delivered pricing
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single zone pricing(such as anywhere in the US)
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multiple zone pricing
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different regions of the US (1 to or 1 to 3)
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price fixing
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illegal (under sherman act). collaboration among firms to fix or set a price
-horizontal- 2 or more firms set prices -vertical- controlling agreements b/t manufac and retialers saying they cant sell below certain price |
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price discrimination
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robinson patman act. different prices to different buyers.
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deceptive pricing
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FTC act. price that misleads the consuemrs.
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3 approaches to setting price
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1.demand oriented
2.cost oriented 3.profit oriented |
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cost oriented approaches
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price setter stresses the cost side of the price problem, not demand. price set by looking at production, marketing costs adding enough for direct exps.
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profit oriented approach
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balance both revenue and costs to set price using profit oriented approaches.
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3 adjustments to list or quotes price
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1.discounts
2.allowances 3.geogrpahical adjustments |
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non-cumulative and cumulative quantity discounts
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nonc-based on size like fedex shipping
-purchase over given time, repeat buyers |
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FOB with freight allowed pricing
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- buyer allowed to deduct feight cost
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basing point pricing
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selecing 1 or more geogrpahical locations from which list price is charged to buyer. ex st. louis is basing point
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predatory pricing
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practice of charging a low pridce for product with intent of driving compeitiors out of business. once out, firm raises price.
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bait and swtich
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offer low produt to get them in door...then offer high produt
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bargains conditional
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buy 1 get 1 free...first product must be sold at regular price
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comparable value comparisons
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false retail value
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comparison w/ suggested prices
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claim its belows mfg suggested price
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former price
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represents price as reduced
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