Flashcards in CH 11-12 Deck (49)
sets high initial prices to
get initial revenue layers from the market.
Market-skimming pricing strategy
2 NEW PRODUCT PRICING STRATEGIES
1. Market-skimming pricing strategy
2. Market-penetration pricing
setting a low price
for a new product
in order to attract a
large number of
buyers and a large
5 Product Mix Pricing Strategies
1. Product line pricing
2. Optional product pricing
3. Captive product
4. By-product pricing
5. Product bundle pricing
takes into account the cost
differences between products in the line, customer
evaluations of their features, and competitors’ prices.
Product line pricing
takes into account optional or
accessory products along with the main product.
Optional product pricing
of products that
must be used
along with the
sets a price for by-products in
order to make the main product’s price more
combines several products at
a reduced price.
Product bundle pricing
7 PRICE ADJUSTMENT STRATEGIES
1. Discount and allowance pricing
2. Segmented pricing
3. Psychological pricing
4. Promotional pricing
5. Geographical pricing
6. Dynamic and personalized pricing
7. International pricing
Reducing prices to reward customer responses such as volume purchases, paying early, or promoting the product
Discount and allowance pricing
Adjusting prices to allow for differences in customers, products, or locations
Adjusting prices for psychological effect
Temporarily reducing prices to spur short-run sales
Adjusting prices to account for the geographic location of customers
Adjusting prices continually to meet the characteristics and needs of individual customers and situations
Dynamic and personalized pricing
Adjusting prices for international markets
PROMOTIONAL MONEY PAID BY MANUFACTURERS TO RETAILERS IN RETURN FOR AN AGREEMENT TO FEATURE THE MANUFACTURER'S PRODUCTS IN SOME WAY
the company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs.
sellers consider the mental aspects of prices, not simply the economics.
prices that buyers carry in their minds and refer to when looking at a given product.
companies will temporarily price their products below list price—and sometimes even below cost—to create buying excitement and urgency.
five geographical pricings
1. FOB-origin pricing
2. Uniform-delivered pricing
3. zone pricing
4. basing-point pricing
5. freight-absorption pricing
setting prices for customers in different parts of the country or world
shipping is free at a fixed factory price to all locations
FOB stands for
free on board
company charges the same price plus freight to all customers, regardless of their location.
All customers within a given zone pay a single total price; the more distant the zone, the higher the price.
the seller selects a given city and charges all customers the freight cost from that city to the customer location, regardless of the city from which the goods are actually shipped.