Marketing Ch 11

Front 1

MAJOR PRICING STRATEGIES

Back 1

1.NEW PRODUCT PRICING STRATEGIES
2.PRODUCT MIX PRICING STRATEGIES
3.PRICE-ADJUSTMENT STRATEGIES
4.PRICE CHANGES

Front 2

2 NEW PRODUCT PRICING STRATEGIES

Back 2

1.MARKET-SKIMMING PRICING
2.MARKET-PENETRATION PRICING

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MARKET-SKIMMING PRICING

Back 3

SETTING A HIGH PRICE FOR A NEW PRODUCT TO SKIM REVENUES LAYER BY LAYER FROM THE SEGMENT WILLING TO PAY THE HIGH PRICE

Front 4

MARKET-SKIMMING CONDITIONS

Back 4

1.PRODUCT'S QUALITY & IMAGE MUST SUPPORT ITS HIGH PRICE
2.THE COSTS OF PRODUCING A SMALLER VOLUME CANNOT BE SO HIGH THEY CANCEL THE ADVANTAGE OF CHARGING MORE

Front 5

MARKET-SKIMMING CONDITIONS

Back 5

1.PRODUCT'S QUALITY & IMAGE MUST SUPPORT ITS HIGH PRICE
2.THE COSTS OF PRODUCING A SMALLER VOLUME CANNOT BE SO HIGH THEY CANCEL THE ADVANTAGE OF CHARGING MORE

Front 6

MARKET-PENETRATION PRICING

Back 6

SETTING A LOW PRICE FOR A NEW PRODUCT IN ORDER TO ATTRACT A LARGE # OF BUYERS & A LARGE MARKET SHARE

Front 7

PRODUCT MIX PRICING

Back 7

THE FIRM LOOKS FOR A SET OF PRICES THAT MAXIMIZES THE PROFITS ON THE TOTAL PRODUCT MIX

Front 8

5 PRODUCT MIX PRICING STRATEGIES

Back 8

1.PRODUCT LINE PRICING
2.OPTIONAL-PRODUCT PRICING
3.CAPTIVE-PRODUCT PRICING
4.BY-PRODUCT PRICING
5.PRODUCT BUNDLE PRICING

Front 9

PRICE POINTS

Back 9

PERCEIVED QUALITY DIFFERENCES THAT SUPPORT THE PRICE DIFFERENCES (LOW-, AVERAGE-, & HIGH-)

Front 10

OPTIONAL-PRODUCT PRICING

Back 10

THE PRICING OF ACCESSORY PRODUCTS ALONG WITH A MAIN PRODUCT

Front 11

CAPTIVE-PRODUCT PRICING

Back 11

SETTING A PRICE FOR PRODUCTS THAT MUST BE USED ALONG W/ A MAIN PRODUCT

Front 12

2-PART PRICING

Back 12

CAPTIVE-PRODUCT PRICING IN THE CASE OF SERVICES--THE PRICE IS BROKEN INTO A FIXED FEE PLUS A VARIABLE USAGE RATE

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BY-PRODUCT PRICING

Back 13

SETTING A PRICE FOR BY-PRODUCTS IN ORDER TO MAKE THE MAIN PRODUCT'S PRICE MORE COMPETITIVE

Front 14

PRODUCT BUNDLE PRICING

Back 14

COMBINING SEVERAL PRODUCTS & OFFERING THE BUNDLE AT A REDUCED PRICE

Front 15

6 PRICE-ADJUSTMENT STRATEGIES

Back 15

1.DISCOUNT & ALLOWANCE PRICING
2.SEGMENTED PRICING
3.PSYCHOLOGICAL PRICING
4.PROMOTIONAL PRICING
5.GEOGRAPHICAL PRICING
6.INTERNATIONAL PRICING

Front 16

DISCOUNTS & ALLOWANCES

Back 16

PRICE ADJUSTMENTS

Front 17

CASH DISCOUNT

Back 17

A CASH REDUCTION TO BUYERS WHO PAY THEIR BILLS PROMPTLY

Front 18

QUANTITY DISCOUNT

Back 18

A PRICE REDUCTION TO BUYERS WHO BUY LARGE VOLUMES

Front 19

DISCOUNT & ALLOWANCE PRICING

Back 19

REDUCING PRICES TO REWARD CUSTOMER RESPONSES SUCH AS PAYING EARLY OR PROMOTING THE PRODUCT

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SEGMENTED PRICING

Back 20

ADJUSTING PRICES TO ALLOW FOR DIFFERENCES IN CUSTOMERS, PRODUCTS, OR LOCATIONS

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PSYCHOLOGICAL PRICING

Back 21

ADJUSTING PRICES FOR PSYCHOLOGICAL EFFECT

Front 22

PROMOTIONAL PRICING

Back 22

TEMPORARILY REDUCING PRICES TO INCREASE SHORT-RUN SALES

Front 23

GEOGRAPHICAL PRICING

Back 23

ADJUSTING PRICES TO ACCOUNT FOR THE GEOGRAPHIC LOCATION OF CUSTOMERS

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INTERNATIONAL PRICING

Back 24

ADJUSTING PRICES FOR INTERNATIONAL MARKETS

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FUNCTIONAL DISCOUNT (TRADE DISCOUNT)

Back 25

PRICE REDUCTION OFFERED BY THE SELLER TO TRADE CHANNEL MEMBERS WHO PERFORM CERTAIN FUNCTIONS SUCH AS SELLING, STORING, & RECORD KEEPING

Front 26

SEASONAL DISCOUNT

Back 26

PRICE REDUCTION TO BUYERS WHO BUY MERCHANDISE OR SERVICES OUT OF SEASON

Front 27

ALLOWANCES

Back 27

PROMOTIONAL MONEY PAID BY MANUFACTURERS TO RETAILERS IN RETURN FOR AN AGREEMENT TO FEATURE THE MANUFACTURERS PRODUCTS IN SOME WAY

Front 28

TRADE-IN ALLOWANCES

Back 28

PRICE REDUCTIONS GIVEN FOR TURNING IN AN OLD ITEM WHEN BUYING A NEW ONE

Front 29

PROMOTIONAL ALLOWANCES

Back 29

PAYMENTS OR PRICE REDUCTIONS TO REWARD DEALERS FOR PARTICIPATING IN ADS & SALES SUPPORT PROGRAMS

Front 30

SEGMENTED PRICING

Back 30

SELLING A PRODUCT OR SERVICE AT 2 OR MORE PRICES, WHERE THE DIFFERENCE IN PRICES IS NOT BASED ON DIFFERENCES IN COSTS

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FORMS OF SEGMENTED PRICING

Back 31

1.CUSTOMER-SEGMENT PRICING
2.PRODUCT-FORM PRICING
3.LOCATION PRICING
4.TIME PRICING

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PSYCHOLOGICAL PRICING

Back 32

PRICING APPROACH THAT CONSIDERS THE PSYCHOLOGY OF PRICES & NOT SIMPLY THE ECONOMICS, THE PRICE IS USED TO SAY SOMETHING ABOUT THE PRODUCT

Front 33

REFERENCE PRICING

Back 33

PRICES THAT BUYERS CARRY IN THEIR MINDS & REFER TO WHEN THEY LOOK AT A GIVEN PRODUCT

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PROMOTIONAL PRICING

Back 34

TEMPORARILY PRICING PRODUCTS BELOW THE LIST PRICE TO INCREASE SHORT-RUN SALES

Front 35

GEOGRAPHICAL PRICING

Back 35

DECIDING HOW TO PRICE ITS PRODUCTS FOR CUSTOMERS LOCATED IN DIFFERENT PARTS OF THE COUNTRY OR WORLD

Front 36

5 GEOGRAPHICAL PRICING STRATEGIES

Back 36

1.FOB-ORIGIN PRICING
2.UNIFORM-DELIVERED PRICING
3.ZONE PRICING
4.BASING-POINT PRICING
5.FREIGHT-ABSORPTION PRICING

Front 37

FOB-ORIGIN PRICING

Back 37

GEOGRAPHICAL PRICING STRATEGY IN WHICH GOODS R PLACED FREE ON BOARD A CARRIER, THE CUSTOMER PAYS THE FREIGHT FROM THE FACTORY TO THE DESTINATION

Front 38

UNIFORM-DELIVERED PRICING

Back 38

GEOGRAPHICAL PRICING STRATEGY IN WHICH THE COMPANY CHARGES THE SAME PRICE PLUS FREIGHT TO ALL CUSTOMERS REGARDLESS OF THEIR LOCATION

Front 39

ZONE PRICING

Back 39

GEOGRAPHICAL PRICING STRATEGY IN WHICH THE COMPANY SETS UP 2 OR MORE ZONES: ALL CUSTOMERS WITHIN A ZONE PAY THE SAME TOTAL PRICE, THE MORE DISTANT THE ZONE THE HIGHER THE PRICE

Front 40

BASING POINT PRICING

Back 40

GEOGRAPHICAL PRICING STRATEGY IN WHICH THE SELLER DESIGNATES SOME CITY AS A BASING POINT & CHARGES ALL CUSTOMERS THE FREIGHT COST FROM THAT CITY TO THE CUSTOMER LOCATION, REGARDLESS OF THE CITY FROM WHICH THE GOODS R ACTUALLY SHIPPED

Front 41

FACTORS OF INTERNATIONAL PRICING

Back 41

1.ECONOMIC CONDITIONS
2.COMPETITIVE SITUATIONS
3.LAWS & REGULATIONS
4.DEVELOPMENT OF THE WHOLESALING & RETAILING SYSTEM

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PRICE ESCALATION

Back 42

GOODS THAT R RELATIVELY INEXPENSIVE AT HOME MAY CARRY HIGHER PRICE TAGS IN OTHER COUNTRIES

Front 43

2 PRICE CHANGES

Back 43

1.PRICE CUTS
2.PRICE CHANGES

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2 REASONS FOR PRICE CUTS

Back 44

1.EXCESS CAPACITY
2.FALLING MARKET SHARE IN THE FACE OF STRONG COMPETITION

Front 45

PRICE FIXING

Back 45

PRICE COLLUSION

Front 46

PREDATORY PRICING

Back 46

SELLING BELOW COST WITH THE INTENTION OF PUNISHING A COMPETITOR OR GAINING HIGHER LONG-RUN PROFITS BY PUTTING COMPETITORS OUT OF BUSINESS

Front 47

RESALE PRICE MAINTENANCE

Back 47

WHEN A MANUFACTURER REQUIRES DEALERS TO CHARGE A SPECIFIED RETAIL PRICE FOR ITS PRODUCT

Front 48

DECEPTIVE PRICING

Back 48

WHEN A SELLER STATES PRICES OR PRICE SAVINGS THAT MISLEAD CONSUMERS OR ARE NOT ACTUALLY AVAILABLE TO CONSUMERS

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PRICE CONFUSION

Back 49

WHEN FIRMS EMPLOY PRICING METHODS THAT MAKE IT DIFFICULT FOR CONSUMERS TO UNDERSTAND JUST WHAT PRICE THEY ARE REALLY PAYING

Front 50

FORMS OF PROMOTIONAL PRICING

Back 50

1.LOSS LEADERS
2.SPECIAL-EVENT PRICING
3.CASH REBATES
4.LOW-INTEREST FINANCING, LONGER WARRANTIES, OR FREE MAINTENANCE
5.DISCOUNTS

Front 51

FREIGHT-ABSORPTION PRICING

Back 51

GEOGRAPHICAL PRICING STRATEGY IN WHICH THE SELLER ABSORBS ALL OR PART OF THE ACTUAL FREIGHT CHARGES IN ORDER TO GET THE DESIRED BUSINESS

Front 52

MARKET-PENETRATION PRICING CONDITIONS

Back 52

1.MARKET MUST BE HIGHLY PRICE SENSITIVE SO THAT A LOW PRICE PRODUCES MORE MARKET GROWTH
2.PRODUCTION & DISTRIBUTION COSTS MUST FALL AS SALES VOLUME INCREASES
3.LOW PRICE MUST HELP KEEP OUT THE COMPETITION & THE PRICER MUST MAINTAIN ITS LOW-PRICE POSITION

Front 53

PRODUCT LINE PRICING

Back 53

SETTING THE PRICE STEPS BETWEEN VARIOUS PRODUCTS IN A PRODUCT LINE BASED ON COST DIFFERENCES BETWEEN THE PRODUCTS, CUSTOMER EVALUTIONS, & COMPETITOR PRICES