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29 Cards in this Set
- Front
- Back
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Price |
The money or other considerations exchanged for the ownership or use of a good or service |
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Profit Equation |
Profit = Total revenue - Total cost |
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Steps to price a product |
Identifying Pricing Constraints and Objectives Estimating Demand and Revenue Estimating Cost, Volume and Product Relationships Selecting an Appropriate Price Level Setting the List or Quoted Price Making Special Adjustment to the List or Quoted Price
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Pricing Constraints |
Factors that limit the latitude of price a firm may set |
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Pricing Objectives |
Expectations that specify the role of price in an organization's marketing and strategic plans |
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Types of Pricing Objectives |
Profit Sales Market Share Unit Volume Survival Social Responsibility |
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Demand Curve |
The summation of points representing the maximum number of products consumers will buy at a given price |
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Total Cost |
Total expenses incurred by a firm in producing and marketing a product |
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Fixed Cost |
The firms expenses that are stable and do not change with the quantity of the product that is produced and cost |
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Variable Cost |
The sum of the expenses of a firm that vary directly with the quantity of products that is produced and sold. |
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Break-Even Analysis |
A technique that analyses the relationship between the total revenue and total cost to determine the profitability at various levels of outputs. |
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BEP |
Fixed cost / (Unit Price - Unit Variable Cost) |
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Skimming Pricing |
The highest initial price that customers really desiring a product are willing to pay |
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Penetration Pricing |
Setting a low initial price on a new product to appeal immediately to the mass market |
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Presige Pricing |
Setting a high price on a product to attrack quality or status conscious customers |
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Price Lining |
Pricing a line of products at many different points
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Odd-Even Pricing |
Setting prices a few dollars or cents under an even number |
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Target Pricing |
The practive of deliveratly adjusting the composition of features of a product to achieve the target price to consumers |
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Bundle Pricing |
Two or more products at a reduced price |
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Yeild Management Pricing |
Changing different prices to maximize revenue for a set amount of capacity at any given time. |
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Standard Markup Pricing |
Adding a fixed percentage to the cost of all items in a product class |
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Cost-Plus Pricing |
Summing the total unit cost of providing a product or service and adding a specified amount to the cost to arrive at a price. |
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Experience Curve Pricing |
The unit cost of many products declines by 10 to 30 percent each time a firm's expeience at producing and selling them doubles |
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Price Fixing |
A conspiracy among firms to set prices for a product |
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Verticle Price Fixing |
Controller agreements between buyers and sellers that they do not sell product below a minumum retail price. (illegal under competition act) |
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Price Discrimination |
The practive of charging different prices to different buyers for goods of like grade and quality. |
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Deceptive Pricing |
Price deals that mislead consumers fall into the category of deceptive pricing |
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Predatory Pricing |
Geographic = cant sell a product in one region compared to another. Another form is selling so low competitors are forced out of business |
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Delivered Pricing |
Refusing a customer delivery of an article on the same trade terms as other customers in the same location. |
