ch 9 terms Flashcards
(60 cards)
criteria of pricing
above costs and below consumer value perception
equilibrium
define consumer value based pricing
assess customer value perception, target price to match
define value based pricing
customer needs and perceptions influence cost and product design choices
define value based pricing
customer needs and perceptions influence cost and product design choices
define good value pricing
right combo of quality and service at cheap price
what is EDLP
Every day low pricing
define high-low pricing
mostly high costs, sometimes crazy sales
eg. evry jewels
define value added pricing
add features to justify higher price and stand out from competitors
define competition based pricing
use competition as point of reference
set price based on our value vs theirs
define cost based pricing
design, determine costs, convince buyers to pay that amount
define cost-plus pricing
overhead costs + promo and distribution + markup to make profit
define break even pricing
just want to make back costs
break even pricing equation
fixed costs/(unit price - unit variable cost)
define market skimming price
high price at release and lower over time
ex. tech
define market penetrating pricing
low cost to attract big chunk of market share
define fixed costs
don’t change based on number of units produced/sold
rent
define variable costs
change depending on # of units produced
(labour, materials)
2 internal factors considered in pricing
overall marketing strat, objectives, mix
organizational considerations: pricing teams
external factors of pricing MIDE
market
impact on other parties
demand
economy
define pure competition market
so many producers of one good that no one makes an impact
define monopolistic market
many buyers and sellers all with different prices because they’re all unique
define oligopolistic market
handful of big sellers
ex. internet
define pure monopoly market
one seller aka price maker
things to consider in market external factor
resellers reaction
govt influences
social concerns
