Types of Pricing
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Created by:
kekoamac on March 27, 2012
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Description:
Civics notes for tomorrows' quiz. Please say that you used them if you do, on the chat bar.
Classes:
civics final, paraskills, Join Me!!!, Paragon Prep 7th, PWNAGE!!!!!, Septem (see more)
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12 terms
Terms | Definitions |
|---|---|
 creaming/skimming | *selling a product at a high price *you are sacrificing high sales volume for the high price |
| When do you cream or skim products? | in the early stages of the product |
| premium pricing | *set prices artificially high *may give customers the impression that your products are the best, such as the highest quality and exclusiveness |
| loss leader | *sell selected products at a loss *brings people to your store, where they may buy other high profit margin products |
| What products are usually loss leaders? | perishable items |
| Where are loss leaders placed? | in the back of the store |
| competitive pricing | when you base your price on those of your competitions |
| cost plus pricing | calculate price by adding a profit margin to your production cost |
| physiological pricing | make customers think prices are lower than they really are |
| predatory pricing | *sets prices artificially low *attempt to drive competitors out of the market *raise prices later *there will always be other competition |
| price leadership | lowest price |
| penetration pricing | *short term plan to win market share *a percentage of customers in a certain area *once you 'win' customers, prices slowly creep up to normal levels |
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