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37 Cards in this Set
- Front
- Back
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Cash discounts
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Discounts offered to buyers as an incentive for paying the invoice amount within a specified number of days
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Competition
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A rivalry between businesses to attract scarce consumer dollars
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Cost of merchandise sold
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The amount paid by a business for products purchased for resale or for use in the production of other goods
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Cost-oriented pricing
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Implemented by carefully examining all of the costs associated with carrying a product and selling it to consumers then adding the desired profit to arrive at a selling price
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Cost-plus pricing
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A pricing strategy that examines costs for individual products or services and adds a standard markup
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Cumulative quantity discounts
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Based on a buyer’s total purchases during a specified period of time.
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Demand
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The number of products consumers are willing to buy at a given time and a given price
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Demand oriented pricing
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Most effective when selling products with inelastic demand, this pricing strategy requires price planners to estimate the value customers place on products and set prices accordingly
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Direct competition
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Competition between businesses that have similar formats and sell similar products
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Elastic demand
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Demand that is sensitive to a change in price of the product
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Fixed costs
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Costs that remain constant over a period of time regardless of sales volume
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Fixed pricing
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(One-Price Policy) A policy under which an organization charges the same prices to all customers regardless of the quantity of the purchase
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Indirect competition
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Competition between businesses that have dissimilar formats and sell dissimilar products
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Inelastic demand
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Demand that is not sensitive to a change in price of the product
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Loss leaders
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A product that is sold below costs in an effort to increase customer traffic
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Markdowns
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Reductions in selling price used to stimulate sales, dispose of slow moving/discontinued merchandise, meet competitors’ prices, and/or increase customer traffic
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Market price
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The price that prevails in the market for a particular good at a specific time
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Markup pricing
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Pricing strategy that adds a predetermined percentage to the cost of products
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Non-price Competition
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Competition based on factors other than price as a means to attract customers
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Non-cumulative quantity discounts
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Reductions given to buyers for a one-time purchase or shipment
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Odd/even cent pricing
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Psychological pricing technique based on the principle that prices ending in odd numbers ($5.99) communicate a bargain and prices ending in even numbers ($6.00) communicate quality
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Opportunity cost
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The opportunity cost is the option that is given up when a consumer chooses one product/service over another
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Penetration pricing
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Setting a low price when introducing a product into a competitive market to motivate customers to purchase
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Prestige pricing
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Pricing technique that sets a higher-than-average price for products in order to communicate quality and status
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Price
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The amount charged to customers in exchange for goods and services
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Price Competition
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Competition that uses price as the primary means to attract customers
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Price lining
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Establishing price points between products in a product line to communicate differences in quality and/or service to consumers
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Profit
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Revenue remaining after the expenses of running the business have been deducted from income
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Promotional pricing
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Selling a product at a temporarily lower price in order to attract customers
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Psychological pricing
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Pricing technique based on the belief that customers form their perceptions of products on price and these perceptions affect customer buying decisions
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Quantity discounts
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Reduction in price given by manufacturers/ wholesalers when a large or specified quantity is purchased
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Skimming pricing
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Setting a high price when introducing a product that has little competition and will appeal to customers who like to be the first to have the latest products
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Supply
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The number of products manufacturers are willing to produce at a given time and at a given price
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Trade discounts
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Functional discounts) Discounts offered to channel members for performing certain functions like storing or record keeping
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Unit pricing
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Stating the price of a product per unit of standard measure
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Variable costs
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Costs that vary based on sales volume or changes in business needs
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Variable pricing
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Flexible-Price Policy) Pricing technique that encourages customers to bargain with sellers in an effort to obtain the best price for products and services
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