Marketing: Chapter 13

Front 1

Price

Back 1

-the overall sacrifice a consumer is willing to make-money, time, energy-to acquire a specific product or service

Front 2

5 C's of Pricing

Back 2

1. customers
2. company objectives
3. costs
4. channel members
5. competition

Front 3

Profit Orientation

Back 3

-a company objective that can be implemented by focusing on target profit pricing, maximizing profits or target return pricing

Front 4

Target Profit Pricing

Back 4

-a pricing strategy
-implemented by firms when they have a particular profit goal as their overriding concern
-uses price to stimulate a certain level of sales

Front 5

Maximizing Profits

Back 5

-a profit strategy
-relies primarily on economic theory
-if a firm can accurately specify a mathematical model that captures all the factors requires to explain and predict sales and profits, it should be able to identify the price at which its profits are maximized

Front 6

Target Return Pricing

Back 6

-a pricing strategy
-implemented by firms less concerned with the absolute level of profits and more interested in the rate at which their profits are generated relative to their investments
-designed to produce a specific return on investment

Front 7

Sales Orientation

Back 7

-company objective based on the belief that increasing sales will help the firm more than increasing profits

Front 8

Premium Pricing

Back 8

-a competitor based pricing method by which the firm deliberately prices a product above the prices set for competing products to capture those consumers who always shop for the best or for whom price does not matter

Front 9

Competitor Orientation

Back 9

-company objective based on the premise that the firm should measure itself primarily against the competition

Front 10

Competitive Parity

Back 10

-a firms strategy of setting prices that are similar to those of major competitors

Front 11

Status Quo Pricing

Back 11

-competitor oriented strategy in which a firm changes prices only to meet those of the competition

Front 12

Customer Orientation

Back 12

-company objective based on the premise that the firm should measure itself primarily according to whether it meets its customers needs

Front 13

Loss Leader Pricing

Back 13

-lowering the price below the store's cost

Front 14

Bait and Switch

Back 14

-luring customers into the store with a very low advertised price on an item, only to aggressively pursue them into purchasing higher priced model by disparaging the lower priced model

Front 15

Predatory Pricing

Back 15

-a firms practice of setting a very low price for one or more of its products with the intent to drive its competition out of business
-illegal under Sherman and Federal Trade Commission Acts

Front 16

Price Discrimination

Back 16

-the practice of selling the same product to different resellers or to the ultimate consumer at different prices

Front 17

Price Fixing

Back 17

-the practice of colluding with other firms to control prices

Front 18

Horizontal Price Fixing

Back 18

-occurs when competitors that produce and sell competing products collude, or work together, to control prices, effectively taking price out of the decision process for consumers

Front 19

Vertical Price Fixing

Back 19

-occurs when parties at different levels of same marketing channel collude to control the prices passed on to consumers