Marketing 300- Ch. 17

Front 1

Bait pricing:

Back 1

• Setting some very low prices to attract customers but trying to sell more expensive models or brands once the customer is in the store.

Front 2

Demand backward pricing:

Back 2

• Setting an acceptable final consumer price and working backward to what a producer can charge.
• It is commonly used by producers of consumer products, especially shopping products such as women‘s clothing and appliances.
• The producer’s starts with the retail (reference) price for a particular item and then works backward – subtracting the typical margins that channel members expect.

Front 3

Leader pricing:

Back 3

• Setting some very low prices – real bargains – to get customers into retail stores. The idea is not only to sell large quantities of the leader items, but also to get customers into the store to buy other products.

Front 4

Odd-even pricing:

Back 4

• Setting prices that end in certain numbers. Producers selling below $50 often end in the number 5 or 9… Prices for higher-priced products are often $1 or $2 dollars below the new even dollar figure – such as $98 or $99 instead of $100.

Front 5

Prestige pricing:

Back 5

• Setting a rather high price to suggest high quality or high status. Some target customers want the best, so they will buy at a high price.
• If the price seems cheap, they worry about the quality and don‘t buy.

Front 6

Price lining:

Back 6

• Setting a few price levels for a product line and then marking all items at these prices.
• This assumes that customers have a certain reference price in mind that they expect to pay for a product.

Front 7

Psychological pricing:

Back 7

• Setting prices that have special appeal to target customers. Some people think there are whole ranges of prices that potential customers see as the same; so price cuts within that range have no effect.
• Customers may buy more if the prices are just below their target range, until they drop too low into another range that customers view as the same, and so on.

Front 8

Reference price:

Back 8

• The price consumers expect to pay for many of the products they purchase.
• Different customers have different reference prices for the same basic type of purchase.

Front 9

Value in use pricing:

Back 9

• Setting prices that will capture some of what customers will save by substituting the firm‘s product for the one currently being used.