Principles Of Marketing, Ch. 11 "pricing Strategies"

Front 1

Market-Skimming Pricing (Price Skimming)

Back 1

Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales.
ex. iPhone releases

Front 2

Market-Penetration Pricing

Back 2

Setting a low price for a new product to attract a large number of buyers and a large market share.

Front 3

Product Line Pricing

Back 3

Setting the price steps between various products in a product line based on cost differences between the products, customer evaluation of different features, and competitor's prices.

Front 4

Optional Product Pricing

Back 4

The pricing of optional or accessory products along with a main product.
ex. GPS upgrade in a new car

Front 5

Captive Product Pricing

Back 5

Setting a price for products that must be used along with a main product, such as blades for a razor and games for a videogame console.

Front 6

By-Product Pricing

Back 6

Setting a price for by-products to make the main product's price more competitive.

Front 7

Product Bundle Pricing

Back 7

Combing several products and offering the bundle at a reduced price.
ex. Cable providers

Front 8

Discount

Back 8

A straight reduction in price on purchases during a stated period of time or of larger quantities.

Front 9

Allowance

Back 9

Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way.

Front 10

Segmented Pricing

Back 10

Selling a product or service at two or more prices, where the difference in price is not based on differences in costs.

Front 11

Psychological Pricing

Back 11

Pricing that considers the psychology of prices, not simply the economics; the price says something about the product.

Front 12

Reference Prices

Back 12

Prices that carry in their minds and refer to when they look at a given product.

Front 13

Promotional Pricing

Back 13

Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales.

Front 14

Geographical Pricing

Back 14

Setting prices for customers located in different parts of the country or world.

Front 15

FOB-origin Pricing

Back 15

A geographical pricing strategy in which goods are placed free on board a carrier; the customer pays the freight from the factory to the destination.

Front 16

Uniform-Delivered Pricing

Back 16

A geographical pricing strategy in which the company charges the same price plus freight to all customers, regardless of their location.

Front 17

Zone Pricing

Back 17

A geographical pricing strategy in which the company sets up to or more zones. All customers within a zone pay the same total price; the more distant the zone, the higher the price.

Front 18

Basing-Point Pricing

Back 18

A geographical pricing strategy in which the seller designates some city as a basing point and charges all customers the freight cost from that city to the customer.

Front 19

Freight-Absorption Pricing

Back 19

A geographical pricing strategy in which the seller absorbs all or part of the freight charges to get the desired business.

Front 20

Dynamic Pricing

Back 20

Adjusting prices continually to meet the characteristics and needs of individual customers and situations.