Pricing Flashcards
(11 cards)
What is pricing?
Price is the value customers sacrifice to benefit from receiving and using a good or service.
What is cost-oriented pricing?
Focuses on internal cost instead of customers’ will to pay - minimum price necessary to make profit.
What is competitor-oriented pricing?
Includes going-rate pricing and competitive bidding, where multiple suppliers bid against each other for a project.
What is customer-oriented pricing?
Set on how the customer values a product or service.
What is dynamic pricing?
Popular in digital technology; types include demand pricing and real-time pricing.
How do consumers perceive product prices?
Many consumers perceive product prices as markers of quality and brand image.
What are some ethical issues in pricing?
- Price fixing
- Predatory pricing
- Deceptive pricing
- Price discrimination
What is trade-off analysis?
Measures the trade-off between price and other product features.
What are characteristics of high price market segments?
- Lack of competition
- Customers’ ability to pay
- High pressure to buy
- Perceived value of product
What are conditions for low price market segments?
- No basis to charge premium price
- Sell more units at a lower price
- Low margins serve as a barrier to entry
What pricing challenges do businesses face?
- Choosing the right pricing strategy
- When to increase or reduce prices
- Customers’ unwillingness to pay
