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40 Cards in this Set
- Front
- Back
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Value |
Ratio of the benefits a customer receives compared to the costs |
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Price |
The customers perception of the offerings price-a key determinant of key value |
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Pricing objectives |
Desired or expected result associated with a pricing strategy. Must be consistent with other marketing related obj |
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Penetration pricing |
Aggressive, high market share |
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Price skimming |
Market entry at the highest possible price |
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Target return on investment |
Bottom line profit is established first and then pricing is set to achieve target (max profit) |
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Price elasticity of demand |
Measure of customers price sensitivity estimated by dividing relative changes in quantity sold by relative changes in price |
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Elasticity equation |
% change in quantity demanded/ % change in price |
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Price war |
Company purposely makes pricing changes to undercut competition |
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Stability pricing |
Firm attempts to find a neutral set point for price that is neither low enough to raise the ire of competition nor high enough to put the value at risk with customers |
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Value pricing |
Overly attempts to take into account the role of price as it clearly reflects the bundle of benefits sought by the customer |
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Product line pricing/price lining |
Affords the marketing manager the opportunity to develop a rational pricing strategy across a complete line of related items |
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Price points |
Reflect the difference in benefits offered as the customer moves up and down the product line |
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Captive/complementary pricing |
Commitment from customers to a basic product or system that requires continual purchases to operate |
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Price bundling |
Purchasing a package deal at a reduced price vs buying each product individually |
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Reference pricing |
Comparing prices of other competitors prices |
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Prestige pricing |
Prices relatively higher than the competition |
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Odd/even pricing |
Whole vs non whole numbers |
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Psychological pricing |
Creating a perception about price |
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One price strategy |
Other than temporary price reductions for promotional reasons or clearance items, the price marked is usually what it is sold for |
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Variable pricing |
Customers are encouraged to haggle prices |
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Everyday low prices |
Same everyday |
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High/low pricing |
Periodic heavy promotional pricing to build traffic and volume |
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Auction pricing |
Bidding, internet, ebay, etc |
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Reverse auction example |
Priceline.com |
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Mark up on sales price |
Divide the markup cost by the sales price |
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Discounts |
Direct, immediate reductions in price provided to purchasers |
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Allowances |
Remit monies to purchasers after the facts |
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5 types of discounts |
Cash, trade, quantity, seasonal, promotional |
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FOB pricing |
Free on board- title transfers and freight is paid on the goods being shipped are based on the FOB location |
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Uniform delivered pricing |
Same delivery fee is charged to customers regardless of geographic location in the states |
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Zone pricing |
Shippers set up geographic pricing zones based on the distance from the shipping location |
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Just noticeable price difference |
The amount of change that can take place without affecting customer demand |
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Price fixing
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Set prices at a mutually beneficial high amount |
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Price discrimination |
Seller offers different prices to different customers without a substantive basis, competition is reduced |
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Deceptive pricing |
Stating prices in a way that gives a false impression |
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Bait and switch |
Seller has no intention to make a lower priced item available for sale |
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Fair trade laws |
Limits dealers on their pricing strategies |
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Min markup laws |
Require products to be marked up a certain percentage |
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Loss leader products |
Priced below cost to get people into the store |
