Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
12 Cards in this Set
- Front
- Back
|
price |
amount of money exchanged for a product or service price= list price - discount + fees |
|
|
value |
consumers perceived benefit from a product |
|
|
profit equation |
profit= total revenue - total cost |
|
|
6 steps in setting a price |
1. identify pricing objectives and constraints 2. estimate demand and revenue 3. determine cost, volume, and profit relation 4. select an approximate price level 5. set the list or quoted pricing 6. adjust the list or quoted price |
|
|
price elasticity of demand |
inelastic- a change in price will create a small change in demand (necessities) elastic- a change in price will create a large change in demand (luxuries) |
|
|
Break even analysis |
relationship between costs and revenues to determine profitability at different sales volumes |
|
|
demand oriented pricing |
1. skimming- TV, iphone 2. penetration- IKEA, Dell 3. prestige - rolex, tiffany's 4. price lining- lawn mowers 5. odd-even- gas 6. target- camera 7. bundle- happy meal 8. yield management- plane tickets |
|
|
cost oriented pricing |
1. standard markup pricing- Costco 2. cost-plus pricing- construction 3. experience curve pricing- DVD player |
|
|
profit oriented pricing |
1. target profit pricing 2. target return on investment pricing 3. target return on sales pricing |
|
|
competition oriented pricing |
1. customary pricing- gumball machine 2. above, at, below market pricing- Neiman Marcus 3. Loss leader pricing- Black Friday sales |
|
|
effects on pricing |
company effects- substitutes, line pricing, product life cycle consumer effects- beware of setting middlemen against one another competition effects- pricing wars |
|
|
laws and regulations in pricing |
price fixing- conspiracy among companies to set a certain price price discrimination- changing the price for different buyers for the same product predatory pricing- setting price very low to drive out competition |
