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27 Cards in this Set

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The amount of money charged for a product or service, or the sum of all the values that customers give up in order to gain the benefits of having or using a product or service.
Value-based pricing
Setting price based on buyers' perceptions of value rather than on the seller's cost.
Good-value pricing
Offering just the right combination of quality and good service at a fair price.
Value-added pricing
Attaching value-added features and services to differentiate a marketing offer and support higher prices, rather than cutting prices to match competitors.
Fixed costs
Costs that do not vary with production or sales level.
Variable costs
Costs that vary directly with the level of production.
Total costs
The sum of the fixed and variable costs for any given level of production.
Cost-plus pricing
Adding a standard markup to the cost of the product.
Break-even pricing
Setting price to break even on the costs of making and marketing a product; or setting price to make a target profit.
(target profit pricing)
Target costing
Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met.
Demand curve
A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged.
Price elasticity
A measure of the sensitivity fo demand to changes in the price.
(demand hardly changes with small change in price: inelastic - demand changes greatly: elastic)
Market-skimming pricing
Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price, the company makes fewer but more profitable sales.
Market-penetration pricing
Setting a low price for a new product in order to attract a large number of buyers and a large market share.
Product line pricing
Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices.
Optional-product pricing
The pricing of optional or accessory products along with a main product.
Captive-product pricing
Setting a price for products that must be used along with a main product, such as blades for a razor and film for a camera.
By-product pricing
Setting a price for by-products in order to make the main product's price more competitive.
Product bundle pricing
Combining several products and offering the bundle at a reduce price.
A straight reduction in price on purchases during a stated period of time.
Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way.
Segmented pricing
Selling a product or service at two or more prices, where the difference in prices is not based on differences in cost.
Psychological pricing
A pricing approach that considers the psychology of prices and not simply the economics; the price is used to say something about the product.
Reference prices
Prices that buyers carry in their minds and refer to when they look at a given product.
Promotional pricing
Temporarily pricing products below the list price, and sometimes even below costs, to increase short-run sales.
Geographical pricing
Setting price based on the buyer's geographic location.
Dynamic pricing
Adjusting prices continually to meet the characteristics and needs of individual customers and situations.