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18 Cards in this Set

  • Front
  • Back
• Market-Skimming Pricing
o Setting a high price for a new product to skim maximum revenues layer by layer from segments willing to pay the price
• Market-Penetration Pricing
o Setting a low price for a new product in order to attract a large number of buyers and a large market share
• Product Line Pricing
o Setting price steps between product line items (different lines of lawnmowers cheapexpensive) management must decide on the price steps to set between the various products in a line
• Optional-Product Pricing
o Pricing optional or accessory products sold with the main product (CD changer in a car)
• Captive-Product Pricing
o Pricing products that must be used with the main product (you make high margins on the accessories not on the actual product; i.e. Mach 3, printer cartridges)
o Services: two-part pricing strategy
• By-Product Pricings
o Pricing low-value by-products to get rid of them (dunkin donuts munchkins)
• Product Bundle Pricing
o Pricing bundles of products sold together (software bundles at a lower price than if you had to buy each thing individually)
• Discount
straight reduction to price that is given to a customer within a certain time frame
• Functional/Trade Discount
if somebody performs a function for you, you give them a discount
• Segmented Pricing
o Customer-segment; movie theaters charging different prices for students and adults
• Psychological Pricing
o Sellers consider the psychology of prices and not simply the economics
o The price is used to say something about the product
o FOB-origin
a geographical pricing strategy in which goods are placed free on board a carrier; the customer pays the freight from the factory to the destination
• Consumer penalties
extra fees paid by consumer for violating the terms of the purchase agreement
o Price fixing
sellers must set prices without talking to competitors
o Predatory pricing
selling below costs with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business
• Retail price maintenance
a manufacturer cannot require dealers to charge a specified retail price for its product. Although the seller can propose a manufacturer’s suggested retail price to dealers, it cannot refuse to sell to a dealer who takes independent pricing action.
• Discriminatory pricing
every retailer is entitled to the same price terms from a given manufacturer whether the retailer is Sears or the local bicycle shop
• Deceptive pricing
when a seller states prices or price savings that mislead consumers or are not actually available to consumers. Setting artificially high regular prices and announcing sale prices closer to its everyday prices