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30 Cards in this Set

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