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16 Cards in this Set
- Front
- Back
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What is Value-based pricing?
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Uses the buyers’ perceptions of value, not the sellers cost, as the key to pricing. Price is considered before the marketing program is set.
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What is Good-value pricing?
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Offers the right combination of quality and good service at a fair price
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What is competition-based pricing?
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Setting prices based on competitors’ strategies, costs, prices, and market offerings.
Consumers will base their judgments of a product’s value on the prices that competitors charge for similar products |
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What is high-low pricing?
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Charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items
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What is Segmented Pricing?
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Used when a company sells a product at 2 difference prices even though the difference is not based on cost.
e.g. Age, Gender |
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What is Value-added pricing
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Attaches value-added features and services to differentiate offers, support higher prices, and build pricing power
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What is Cost-based pricing?
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Setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk
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What is Break-even pricing?
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is the price at which total costs are equal to total revenue and there is no profit
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What are Fixed Costs?
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(also known as overhead) are costs that do not vary with production level or sales revenue. A company must pay bills each month for rent, heat, interest, salaries, and so on regardless of output
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What are Variable Costs?
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Vary directly with the level of production. For example, each hand calculator produced by Texas Instruments incurs the cost of plastic, microprocessor chips, and packaging. Total varies with the number of units produced
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How to Calculate UNIT COST?
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Unit Costs:
Variable Costs + Fixed Costs/Unit Sales |
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How do you determine MARKUP COST?
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Markup Cost:
Unit Costs/ (1 - Desired Return on Sales) Desired return on Sales is a percentage (usually) |
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How do you calculate PRICE ELASTICITY OF DEMAND?
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% change in quantity demand/ % change in price
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How to Calculate BREAK EVEN?
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FIXED COSTS/ (PRICE - VARIABLE COSTS)= BREAK EVEN UNITS
FIXED COSTS= BREAK EVEN(PRICE - VARIABLE COSTS) to find break even price |
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What is Pure Competition?
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A market situation in which there exists a homogeneous product, freedom of entry, and a large number of buyers and sellers none of whom individually can affect price
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What is Oligopolistic Competition?
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A market condition in which sellers are so few that the actions of any one of them will materially affect price and have a measurable impact on competitors.
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