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15 Cards in this Set
- Front
- Back
Price
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The amount of money charged for a product or service; the sum of the values that customers exchange for the benefits of having or using the product or service.
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Customer Value-Based Pricing
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Setting price based on buyers' perceptions of value rather than on the seller's cost.
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Good-Value Pricing
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Offering the right combination of quality and good service at a fair price.
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Value-Added Pricing
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Attaching value-added features and service to differentiate a company's offers and charging higher prices.
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Cost-Based Pricing
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Setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk.
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Fixed Costs (Overhead)
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Cost that do not vary with production or sales level.
ex. Rent, heat bills |
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Variable Costs
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Costs that vary directly with the level of production.
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Total Costs
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The sum of the fixed and variable costs for any given level of production.
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Experience Curve (Learning Curve)
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The drop in the average per-unit production cost that comes with accumulated product experience.
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Cost-Plus Pricing (Markup Pricing)
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Adding a standard markup to the cost of the product.
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Break-Even Pricing (Target Return Pricing)
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Setting price to break even on the costs of making and marketing a product or setting price to make a target return.
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Competition-Based Pricing
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Setting prices based on competitors' strategies, prices, costs, and market offerings.
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Target Costing
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Pricing that starts with an ideal selling price and then targets costs that will ensure that the price is met.
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Demand Curve
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A curve that shows the number of units the market will buy in a given time period, at different prices that might be changed.
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Price Elasticity
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A measure of the sensitivity of demand to changes in price.
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