Exam #4 Part 5 Flashcards
Geographic Pricing (6)
- Origin-point pricing
- Delivered pricing
- Single-zone pricing
- Multiple-zone pricing
- Freight absorption pricing
- Basing-point pricing
Origin-point pricing
FOB (free on board) doesn’t include shipping charge
Delivered pricing
Does incorporate shipping charge
Single-zone pricing
Charges each customer based on average shipping charge on total shipping
Multiple-zone pricing
Modified single-zone
Freight absorption pricing
Seller agrees to return shipping charge
Basing-point pricing
Charged based on certain locations whether it flowed through them or not
Leader Pricing
pricing one or more products attractively to sell a mix
Loss Leader
An extreme example of leader pricing
Price Change Heuristics (2) [depends on (4)]
- Generally FOLLOW when prices are going down
- Generally LEAD when prices are going up
Depends on:
- market share
- production and marketing costs
- product position
- production capacity utilization
Ways to Increase Real Prices (4)
- Adoption of delayed quotation pricing
- Use of escalator clauses
- Unbundling
- Reduction of discounts
List Price
Official Price of a product
Market Price
Actual Price at which a product sells
Deceptive Pricing
Pricing and promotional tactics that disguise the true price customers must pay
Price Fixing
Illegal collaboration between two or more competitors
