Marketing Chapter 18 : Setting The Right Price

Front 1

Price Strategy

Back 1

A basic, long-term pricing framework, which establishes the initial price for a product and the intended direction for a price movement over the product life cycle.

Front 2

Price Skimming

Back 2

A pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion.

Front 3

Penetration Price

Back 3

A pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the mass market.

Front 4

Unfair Trade Practices Acts

Back 4

Laws that prohibit wholesalers and retailers from selling below cost.

Front 5

Price Fixing

Back 5

An agreement between two or more firms on the price they will charge for a product.

Front 6

Predatory Pricing

Back 6

The practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market.

Front 7

Base Price

Back 7

The general price level at which the company expects to sell the good or service.

Front 8

Quantity Discount

Back 8

A price reduction offered to buyers buying in multiple units or about a specified dollar amount.

Front 9

Cumulative Quantity Discount

Back 9

A deduction from list price that applies to the buyer's total purchases made during a specific period.

Front 10

Noncumulative Quantity Discount

Back 10

A deduction from list price that applies to a single order rather than to the total volume of orders placed during a certain period.

Front 11

Cash Discount

Back 11

A price reduction offered to a consumer, an industrial user, or a marketing intermediary in return from prompt payment of a bill.

Front 12

Functional Discount (Trade Discount)

Back 12

A discount to wholesalers and retailer for performing channel functions.

Front 13

Seasonal Discount

Back 13

A price reduction for buying merchandise out of season.

Front 14

Promotional Allowance (Trade Allowance)

Back 14

A payment to a dealer for promotion the manufacture's products.

Front 15

Rebate

Back 15

A cash refund given for the purchase of a product during a specific period.

Front 16

Value Based Pricing

Back 16

Setting the price at a level that seems to the customer to be a good price compared to the prices of other options.

Front 17

FOB Origin Pricing

Back 17

A price tactic that requires the buyer to absorb the freight costs form the shipping point "free on board".

Front 18

Uniform Delivered Pricing

Back 18

A price tactic in which the seller pays the actual freight charges and bills every purchaser an identical, flat freight charge.

Front 19

Zone Pricing

Back 19

A modification of uniform delivered pricing that divided the United Stated (or the total market) into segments or zones and charges a flat freight rate to all customer in a given zone.

Front 20

Freight Absorption Pricing

Back 20

A price tactic in which the seller pays all or part of the actual freight charges and does not pass them on to the buyer.

Front 21

Basing-Point Pricing

Back 21

A price tactic that charges freight from a given (basing) point, regardless of the city from which the goods are shipped.

Front 22

Single-Price Tactic

Back 22

A price tactic that offers all goods and services at the same price (or perhaps two or three prices)

Front 23

Flexible Pricing (variable pricing)

Back 23

A price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities.

Front 24

Price Lining

Back 24

The practice of offering a product line with several items at specific price points.

Front 25

Leader Pricing (Loss-Leader Pricing)

Back 25

A price tactic in which a product is sold near or even below cost in the hope that shoppers will buy other items once they are in the store.

Front 26

Bait Pricing

Back 26

A price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high-pressure selling to persuade consumer to buy more expensive merchandise.

Front 27

Odd-Even Pricing (Psychological Pricing)

Back 27

A price tactic that uses odd-numbered prices to connote bargains and even-numbered prices to imply quality.

Front 28

Price Bundling

Back 28

Marketing two or more products in a single package for a special price.

Front 29

Unbundling

Back 29

Reducing the bundle of services that comes with the basic product.

Front 30

Two-part Pricing

Back 30

A price tactic that charges two separate amounts to consume a single good or service.

Front 31

Consumer Penalty

Back 31

An extra fee paid by the consumer for violating the terms of purchase agreement.

Front 32

Product Line Pricing

Back 32

Setting Prices for an entire line of products.

Front 33

Joint Costs

Back 33

Cost that are shared in the manufacturing and marketing of several products in a line.

Front 34

Delayed-Quotation Pricing

Back 34

A price tactic used for industrial installing and many accessory items in which a firm price in not set until the item is either finished or delivered.

Front 35

Escalator Pricing

Back 35

A price tactic in which the final selling price reflects cost increases incurred between the time the order is places and the time delivery is made.

Front 36

Price Shading

Back 36

The use of discounts by salespeople to increase demand for one or more product in a line.