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30 Cards in this Set
- Front
- Back
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factors affecting price decisions
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internal, external
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internal
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marketing objectives, marketing mix strategy, costs, organizational considerations
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external
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nature of market and demand, competition, environmental factors, government
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develop pricing objectives
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-sales or market share
-profit -competitive effect -customer satisfaction -image enhancement |
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estimate demand
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-graphs of price vs. quantity demanded
-price elasticity |
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determine costs
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-marketing math
-types of cost: fixed, variable -costs at different levels of production -costs as a function of production experience (experience curve, average per-unit cost drops with experience) |
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evaluating pricing environment
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-economic factors (recession, inflation)
-competitive factors(monopolies) -channel concerns (distribution costs) -consumer trends(change) -governmental concerns (legal restrictions, price discrimination) |
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cost-plus pricing
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adding standard markup to cost of the product
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demand-based
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target-costing, setting price to make a target profit
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competition-based
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price leadership
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value-based
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perceived benefit/price, EDLP (Walmart)
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New product
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skim vs. penetrate
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individual products
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two-part pricing, payment pricing
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multiple products
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bundling, captive pricing (printers and ink)
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channel based
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freight, shipping, travel
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e-commerce pricing
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dynamic pricing, auction
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psychological
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-reference pricing
-price-quality inferences -odd-even pricing -price lining -promotional cues |
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market skimming pricing
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high price to skim maximum revenues layer by layer, few but more profitable sales
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market penetration pricing
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low price for a new product to attract a large number of buyers and a large market share
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product line pricing
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setting price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices
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optional product pricing
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pricing of optional or accessory products along with a main product
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captive product pricing
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setting a price for products that must be used along with a main product
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product bundle pricing
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combining several products and offering the bundle at a reduced price
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discount and allowance pricing
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reducing prices to reward customer responses such as paying early or promoting the product
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segmented pricing
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adjusting prices to allow for differences in customers, products, or locations
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psychological pricing
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-adjusting prices ofr psychological effect
-reference prices- prices buyers carry in their minds and refer to when they look at a given product |
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promotional pricing
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temporarily reducing prices to increase short-run sales
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geographical pricing
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account for geographic location of customers
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initiating price cuts
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when there is excess capacity or falling market share because of price competition
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initiating price increases
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increase profits, keep up with rising costs
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