Marketing Principles - 8

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Summary of market principles chapter 8

Price Floor

A minimum price that must be charged to cover costs

Price Leader

A high-volume product priced near cost to attract customers into the store, where it is expected they will buy other, normally priced, products.

Loss Leader

A high-volume product priced below cost to attract customers into the store, where it is expected they will buy other, normally priced, products.

Break-Even Analysis

An analysis designed to estimate the volume of unit sales required to cover total costs.

Marginal Analysis

An analysis designed to determine the effect on costs and revenue when an organisation produces and sells one more unit of product

Cost-based analysis

An analysis designed to determine the effect on costs and revenue when an organisation produces and sells one more unit of product

Competition-based pricing

An approach to pricing based on the prices charged by competitors or on the likely response of competitors to the organisations prices

Geographic Pricing

A pricing strategy that includes price differentials based on those costs that vary with distance between the buyer and seller

Internal preference price

The price expected by consumers, largely based upon their actual experience with the product

External reference price

A price comparison provided by the manufacturer or retailer

Product-line pricing

An approach to pricing that sets prices for groups Of products in a product line rather than for individual products

Penetration Pricing

A pricing tactic based on setting a low price in order to gain rapid market sher and turnover for a new product

Pricing skimming

Charging the highest price that customers who most desire the product are willing to pay, and then later lowering the price to bring in larger numbers of buyers

Differential Pricing

The practise of charging different buyers different prices for the same product

Promotional pricing

The combination of a pricing approach with a promotional campaign

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