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Flashcards in CH 11-12 Deck (49)
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1

sets high initial prices to
get initial revenue layers from the market.

Market-skimming pricing strategy

2

2 NEW PRODUCT PRICING STRATEGIES

1. Market-skimming pricing strategy
2. Market-penetration pricing

3

Involves
setting a low price
for a new product
in order to attract a
large number of
buyers and a large
market share.

Market-penetration pricing

4

5 Product Mix Pricing Strategies

1. Product line pricing
2. Optional product pricing
3. Captive product
pricing
4. By-product pricing
5. Product bundle pricing

5

takes into account the cost
differences between products in the line, customer
evaluations of their features, and competitors’ prices.

Product line pricing

6

takes into account optional or
accessory products along with the main product.

Optional product pricing

7

sets prices
of products that
must be used
along with the
main product.

Captive product
pricing

8

sets a price for by-products in
order to make the main product’s price more
competitive.

By-product pricing

9

combines several products at
a reduced price.

Product bundle pricing

10

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

11

Reducing prices to reward customer responses such as volume purchases, paying early, or promoting the product

Discount and allowance pricing

12

Adjusting prices to allow for differences in customers, products, or locations

Segmented pricing

13

Adjusting prices for psychological effect

Psychological pricing

14

Temporarily reducing prices to spur short-run sales

Promotional pricing

15

Adjusting prices to account for the geographic location of customers

Geographical pricing

16

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

Dynamic and personalized pricing

17

Adjusting prices for international markets

International pricing

18

PROMOTIONAL MONEY PAID BY MANUFACTURERS TO RETAILERS IN RETURN FOR AN AGREEMENT TO FEATURE THE MANUFACTURER'S PRODUCTS IN SOME WAY

Allowances

19

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.

segmented pricing

20

sellers consider the mental aspects of prices, not simply the economics.

psychological pricing

21

prices that buyers carry in their minds and refer to when looking at a given product.

reference prices

22

companies will temporarily price their products below list price—and sometimes even below cost—to create buying excitement and urgency.

promotional pricing

23

five geographical pricings

1. FOB-origin pricing
2. Uniform-delivered pricing
3. zone pricing
4. basing-point pricing
5. freight-absorption pricing

24

setting prices for customers in different parts of the country or world

geographical pricing

25

shipping is free at a fixed factory price to all locations

FOB-origin pricing

26

FOB stands for

free on board

27

company charges the same price plus freight to all customers, regardless of their location.

Uniform-delivered pricing

28

All customers within a given zone pay a single total price; the more distant the zone, the higher the price.

zone pricing

29

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.

basing-point pricing

30

seller absorbs all or part of the actual freight charges to get the desired business.

freight-absorption pricing