Marketing Ch 9

Front 1

Price

Back 1

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.

Front 2

Value-based pricing

Back 2

Setting price based on buyers' perceptions of value rather than on the seller's cost.

Front 3

Good-value pricing

Back 3

Offering just the right combination of quality and good service at a fair price.

Front 4

Value-added pricing

Back 4

Attaching value-added features and services to differentiate a marketing offer and support higher prices, rather than cutting prices to match competitors.

Front 5

Fixed costs

Back 5

Costs that do not vary with production or sales level.

Front 6

Variable costs

Back 6

Costs that vary directly with the level of production.

Front 7

Total costs

Back 7

The sum of the fixed and variable costs for any given level of production.

Front 8

Cost-plus pricing

Back 8

Adding a standard markup to the cost of the product.

Front 9

Break-even pricing

Back 9

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)

Front 10

Target costing

Back 10

Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met.

Front 11

Demand curve

Back 11

A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged.

Front 12

Price elasticity

Back 12

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)

Front 13

Market-skimming pricing

Back 13

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.

Front 14

Market-penetration pricing

Back 14

Setting a low price for a new product in order to attract a large number of buyers and a large market share.

Front 15

Product line pricing

Back 15

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.

Front 16

Optional-product pricing

Back 16

The pricing of optional or accessory products along with a main product.

Front 17

Captive-product pricing

Back 17

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.

Front 18

By-product pricing

Back 18

Setting a price for by-products in order to make the main product's price more competitive.

Front 19

Product bundle pricing

Back 19

Combining several products and offering the bundle at a reduce price.

Front 20

Discount

Back 20

A straight reduction in price on purchases during a stated period of time.

Front 21

Allowance

Back 21

Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way.

Front 22

Segmented pricing

Back 22

Selling a product or service at two or more prices, where the difference in prices is not based on differences in cost.

Front 23

Psychological pricing

Back 23

A pricing approach that considers the psychology of prices and not simply the economics; the price is used to say something about the product.

Front 24

Reference prices

Back 24

Prices that buyers carry in their minds and refer to when they look at a given product.

Front 25

Promotional pricing

Back 25

Temporarily pricing products below the list price, and sometimes even below costs, to increase short-run sales.

Front 26

Geographical pricing

Back 26

Setting price based on the buyer's geographic location.

Front 27

Dynamic pricing

Back 27

Adjusting prices continually to meet the characteristics and needs of individual customers and situations.