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23 Cards in this Set
- Front
- Back
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Segmented Pricing |
Market must be segmentable
Segments must show different degrees of demand
Has to be legal |
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Psychological Pricing |
Occurs when sellers consider the psychology of prices and not simply the economics |
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Reference Prices |
Are prices that buyers carry in their minds and refer to when looking at a given product
Noting current prices
Remembering past prices
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Promotional Pricing |
When prices are temporarily priced below list price or cost to increase demand
Loss leaders
Special event pricing
Cash rebates
Low-interest financing
Longer warrantees
Free Maintenance |
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Risks of Promotional Pricing |
Used too frequently, and copies by competitors can create "deal-prone" customers who will wait for promotions and avoid buying at regular price
Creates price wars |
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Geographical Pricing |
Used for customers in different parts of the country or the world
FOB origin pricing
Uniform delivered pricing
Zone pricing
Basing point pricing
Freight-absorption pricing |
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FOB-Origin (Free on board) pricing |
means that the goods are delivered to the carrier and the title and responsibility passes to the customer |
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Uniform-delivered Pricing |
The company charges the same price plus freight to all customers, regardless of location. |
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Zone Pricing |
Means that the company sets up two or more zones where customers within a given zone pay a single total price |
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Basing-point Pricing |
A seller selects a given city as a basing point and charges all customers the freight cost associated from that city to the customer location, regardless of the city from when the goods are actually shipped. |
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Freight-absorption Pricing |
The seller absorbs all or part of the actual freight charge as an incentive to attract business in competitive markets |
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Dynamic Pricing |
Prices are adjusted continually to meet the characteristics and needs of the individual customer and situations |
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International Pricing |
When priced are set in a specific country based on country-specific factors
Economic conditions
Laws and regulations
Company marketing objective
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Price Cuts Occur Due to: |
Excess Capacity Seeking increased market share |
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Price Increases From: |
Cost inflation Increased Demand Lack of Supply |
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Price Increases: |
Product is hot Company Greed |
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Price Cuts |
New models will be available Models are not selling well Quality Issues |
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Diagram |
p 328 |
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Price Fixing |
Sellers must set prices without talking to competitors |
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Predatory Pricing |
Selling below cost with the intention of punishing a competitor or gaining higher long-term profits by putting competitors out of business |
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Robinson-Patman Act |
Prevents unfair price discrimination by ensuring...
Price discrimination is allowed: -If the seller can prove that costs differ when selling to different retailers
If the seller manufactures different qualities of the same product for different retailers |
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Retail (or resale) Price Maintenance |
When a manufacturer requires a dealer to charge a specific retail price for its products |
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Deceptive Pricing |
Occurs when a seller sates prices or price savings that mislead consumers or are not actually available to consumers
Scanner Fraud: failure of the seller to enter current or sale prices into the computer system
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