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21 Cards in this Set
- Front
- Back
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Five C's Of Pricing
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VALUE --> Customers, Costs, Company Objectives, Channel Members, Competition
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Company Objectives
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Profit, Sales, Competitor, Customer- Oriented
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Profit Orientation
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Target Profit Pricing, Maximizing Profits, Target Return Pricing
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Sales Orientation
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-- Increasing sales will help the firm more than increasing profits -- Premium Pricing (Pricing for those who do not care about price)
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Competitor Orientation
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Strategize according to major competitors, Status Quo Pricing (Pricing based on competition)
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Customer Orientation
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VALUE
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Prestige Product or Services
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Purchased for their status rather than their functionality
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Income Effect
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Change in the quantity of a product demand by consumers due to income
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Substitution Effect
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When there is a product that can be substituted for another if the original product if demand or price changes
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Contribution Margin
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Price/unit - VC/unit
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Break-even Point (1 & 2)
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(1) Fixed Cost / CM
(2) (Fixed Cost + Target Profit)/ CM |
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Price War
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When 2 or more firms compete primarily by lowering prices
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Gray Market
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The Gray Area of retailers selling products at a lower price than the manufacturers
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Cross Shopping
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Purchasing premium priced high status oriented products and mixing them with low prices and price oriented retailed products
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Loss Leader Pricing
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Selling a product at a price below the stores costs
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Loss Leader Pricing
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Selling a product at a price below the stores costs
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Deceptive Reference Prices
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Advertising with inflated or deflated prices
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Predatory Pricing
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Setting very very low prices in order to drive out competition
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Price Discrimination
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Selling products to consumers at DIFFERENT prices
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Price Fixing
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Controlling prices (Collusion)
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Horizontal vs Vertical Price Fixing
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Horizontal is between sellers/ competitors
Vertical is down the channel between manufacturers --> retailers --> consumers |
