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Flashcards in Setting The Right Price Deck (37):
1

Price Strategy

A basic, long-term pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle

2

Price Skimming

A price policy whereby a firm charges a high introductory price, often coupled with heavy promotion

3

Penetration Pricing

A pricing policy whereby a firm charges a relatively low price for a product when it is first rolled out as a way to reach the mass market

4

Status Quo Pricing

Charging a price identical to or very close to the competition's price

5

Unfair Trade Practice Acts

Laws that prohibit wholesalers and retailers from selling below cost

6

Price Fixing

An agreement between two or more firms on the price they will charge for a product

7

Predatory Pricing

The practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market

8

Base Price

The general price level at which the company expects to sell the good or service

9

Quantity Discount

A price reduction offered to buyers buying in multiple units or above a specified dollar amount

10

Cumulative Quantity Discount

A deduction from list price that applies to the buyer's total purchases made during a specific period

11

Non-Cumulative Quantity Discount

A deduction from list price that applies to a single order rather than to the total volume of orders placed during a certain period

12

Cash Discount

A price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill

13

Functional Discount (Trade Discount)

A discount to wholesalers and retailers for performing channel functions

14

Seasonal Discount

A price reduction for buying merchandise out of season

15

Promotional Allowance (Trade Allowance)

A payment to a dealer for promoting the manufacturer's products

16

Rebate

A cash refund given for the purchase of a product during a specific period

17

Value-Based Pricing

Setting the price at a level that seems to the customer to be a good price compared to the prices of other options

18

FOB Origin Pricing

A price tactic that requires the buyer to absorb the fright costs from the shipping point ("free on board")

19

Uniform Delivered Pricing

A price tactic in which the seller pays the actual freight charges and bills every purchaser an identical, flat freight charge

20

Zone Pricing

A modification of uniform delivered pricing that divides the United States (or the total market) into segments or zones and charges a flat freight rate to all customers in a given zone

21

Freight Absorption Pricing

A price tactic in which the seller pays all or part of the actual freight charges and does not pass them on to the buyer

22

Basing-Point Pricing

A price tactic that charges freight from a given (basing) point, regardless of the city from which the goods are shipped

23

Single-Price Tactic

A price tactic that offers all goods and services at the same price (or perhaps two or three prices)

24

Flexible Pricing (Variable Pricing)

A price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities

25

Price Lining

The practice of offering a product line with several items at specific price points

26

Leader Pricing (Loss-Leader Pricing)

A price tactic in which a product is sold near or even below cost in the hope that shoppers will buy other items once they are in the store

27

Bait Pricing

A price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high-pressure selling to persuade consumers to buy more expensive merchandise

28

Odd-Even Pricing (Psychological Pricing)

A price tactic that uses odd-numbered prices to connote bargains and even-numbered prices to imply quality

29

Price Bundling

Marketing two or more products in a single package for a special price

30

Unbundling

Reducing the bundle of services that comes with the basic product

31

Two-Part Pricing

A price tactic that charges two separate amounts to consumer a single good or service

32

Consumer Penalty

An extra fee paid by the consumer for violating the terms of the purchase agreement

33

Product Line Pricing

Setting prices for an entire line of products

34

Joint Cost

A cost that is shared in the manufacturing and marketing of several products in a product line

35

Delayed-Quotation Pricing

A price tactic used for industrial installations and many accessory items in which a firm price is not set until the item is either finished or delivered

36

Escalator Pricing

A price tactic in which the final selling price reflects cost increases incurred between the time the order is placed and the time delivery is made

37

Price Shading

The use of discounts by salespeople to increase demand for one or more products in a line