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31 Cards in this Set

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