readings Flashcards
Price skimming adv
Price skimming has four important advantages. First, a high initial price can be a way to find out what buyers are willing to pay.
Second, if consumers find the introductory price too high, it can be lowered.
Third, a high introductory price can create an image of quality and prestige.
Fourth, when the price is lowered later, consumers may think they are getting a bargain. The disadvantage is that high prices attract competition.
Price skimming
The practice of introducing a new product on the market with a high price and then lowering the price over time is called price skimming. As the product moves through its life cycle, the price usually is lowered because competitors are entering the market.
pentration pricing
Offering new products at low prices in the hope of achieving a large sales volume.
Penetration pricing adv
Penetration pricing has two advantages. First, the low initial price may induce consumers to switch brands or companies.
Second, penetration pricing may discourage competitors from entering the market. Their costs would tend to be higher, so they would need to sell more at the same price to break even.
Leader pricing
Pricing products below the normal markup or even below cost to attract customers to a store where they wouldn’t otherwise shop is leader pricing. A product priced below cost is referred to as a loss leader. Retailers hope that this type of pricing will increase their overall sales volume and thus their profit.
Leader pricing typical items
Items that are leader priced are usually well known and priced low enough to appeal to many customers. They also are items that consumers will buy at a lower price, even if they have to switch brands.
Bundling
Grouping two or more related products together and pricing them as a single product.
The idea behind bundling is to reach a segment of the market that the products sold separately would not reach as effectively. Some buyers are more than willing to buy one product but have much less use for the second. Bundling the second product to the first at a slightly reduced price thus creates some sales that otherwise would not be made.
Odd even pricing
Psychology often plays a big role in how consumers view prices and what prices they will pay.Odd-even pricing (or psychological pricing) is the strategy of setting a price at an odd number to connote a bargain and at an even number to imply quality.
Prestige pricing
The strategy of raising the price of a product so consumers will perceive it as being of higher quality, status, or value is called prestige pricing.
Personal selling
One-on-one communication with customers or potential customers
Showrooming
The process that occurs when a customer visits a brick-and-mortar store to check out a product in person and then goes home to order it online
Promotion mix
Tactics marketers use to communicate with the customer.
Brand value
The financial asset associated with a brand.
Place
Where a product is purchased.
Customer-relationship management
A marketing strategy that focuses on using information about current customers to nurture and maintain strong relationships with them
