36 terms

MKT 3311 Principles of Marketing chapter 21

2012 Pride & Ferrell Marketing UHV
Pricing Objectives
goals that describe what an organization wants 2 achieve through pricing efforts.
One of the most fundamental pricing objectives
Status Quo
can focus on several dimensions, including maintaining a certain market share, meeting competitors' prices, achieving price stability, or maintaining a favorable public image.
Product Quality
market normally results in charging a high price 2cover the high product quality&, perhaps, the high cost of research& development.
Selection of a Basis for Pricing
three major dimensions on which prices can be based are cost, demand,&competition.
Cost-Based Pricing
an organization determines price by adding a dollar amount or a percentage 2 the cost of the product.
Cost-Plus Pricing
a method whereby the seller's costs are determined, & then a specified dollar amount or percentage of the cost is added 2 the seller's cost 2 establish the price.
Markup Pricing
a product's price is derived by adding a predetermined percentage of the cost, called "markup," 2 the cost of the product.
Demand-Based Pricing
customers pay a higher price when demand 4 the product is strong& a lower price when demand is weak.
Competition-Based Pricing
pricing primarily influenced by competitors' prices.
Selection of a Pricing Strategy
an approach or a course of action designed to achieve pricing& marketing objectives. help marketers solve the practical problems of establishing prices.
Differential Pricing
charging different prices 2 different buyers 4 the same quality & quantity of product.
Negotiated Pricing
pricing through bargaining between the seller & customer.
Secondary-Market Pricing
setting one price 4 the primary target market & a different price 4 another market.
Periodic Discounting
the temporary reduction of prices on a patterned or systematic basis.
Random Discounting
temporarily reducing prices on an unsystematic basis.
New-Product Pricing
a necessary part of formulating a marketing strategy & is one of the most fundamental decisions in the marketing mix.
Price Skimming
charging the highest possible price buyers who most desire the product will pay.
Penetration Pricing
is setting the price lower than competing brands 2 penetrate a market & quickly gain a significant market share.
Product-Line Pricing
establishing & adjusting prices of multiple products within a product line. A marketer's goal here is 2 maximize profits 4 an entire product line rather than 2 focus on the profitability of an individual product.
Captive Pricing
involves pricing the basic product in a product line low, but pricing related items that are required 2 operate or enhance it at a higher level.
Premium Pricing
often used when a product line contains several versions of the same product of different quality. It entails giving higher quality or more versatile products the highest prices.
Bait Pricing
occurs when a marketer prices an item in the product line low with the intention of selling a higher-priced item in the line.
Price Lining
the organization sets a limited number of prices 4 selected groups or lines of merchandise.
Psychological Pricing
attempts 2 influence a customer's perception of price 2 make the product's price more attractive.
Reference Pricing
pricing a product at a moderate level & positioning it next 2 a more expensive model or brand.
Bundle Pricing
the packaging together of two or more usually complementary products 2 be sold 4 a single price.
Multiple-Unit Pricing
occurs when two or more of the same product are packaged together & sold 4 a single price.
Everyday Low Prices (EDLP)
setting a low price 4 products on a consistent basis, rather than setting high prices & frequently discounting them.
Odd-Even Pricing
involves ending a price with certain numbers than influence the buyers' perceptions of the price or the product.
Customary Pricing
certain goods are priced primarily on the basis of tradition.
Prestige Pricing
prices are set at an artificially high level 2 convey a prestigious or quality image.
Professional Pricing
used by people with great skill or experience in a particular field or activity.
Price Leaders
Products priced below the usual markup, near cost, or below cost
Special-Event Pricing
advertised sales or price cutting is used 2 increase sales volume & is linked 2 a holiday, season, or special event.
Comparison Discounting
the pricing of a product at a specific level & simultaneously comparing it 2 a higher price.