30 terms

marketing chapter 14

above at or below market pricing
setting a market price for a product or product class based on a subjective feel for the competitors price or market price as the benchmark
basing point pricing
selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer
bundle pricing
the marketing of two or more products in a single package price
cost plus pricing
summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price
customary pricing
setting a price that is dictated by tradition, a standardized channel of distribution or other competitive factors
everyday low pricing
the practice of replacing promotional allowances with lower manufacturer list price
experience curve pricing
a method of pricing based on the learning effect, which holds that the unit cost of many products and services declines by 10 percent to 30 each time a firm's experience at producing and selling them doubles, resulting in possible rapid price reductions
flexible price policy
setting different prices for products and services depending on individual buyers and purchase situations
FOB origin pricing
"free on board" price the seller quotes that includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is occur (seller's factory or warehouse)
loss leader pricing
deliberately selling a product below its customary price not to increase sales but to attract customers attention in hopes that they will buy other products as well
odd even pricing
setting prices a few dollars or cents under an even number
one price policy
setting one price for all buyers of a product or service
penetration pricing
setting a low initial price on a new product to appeal immediately to the mass market
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
prestige pricing
charging a high price to help promote a high-quality image
price discrimination
the business practice of selling the same good at different prices to different customers
price fixing
an agreement among firms to charge one price for the same good
price lining
setting the price of a line of products at a number of different specific pricing points
price war
successive price cutting by competitors to increase or maintain their unit sales or market share
product line pricing
the setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line not for each item
promotional allowances
cash payments or extra amount of "free goods" awarded sellers in the channel of distribution for undertaking certain advertising or selling activities to promote a product
quantity discounts
reductions in unit costs for a larger order
skimming pricing
Setting a high price when introducing a product that has little competition and will appeal to customers who like to be the first to have the latest products.
standard markup pricing
adding a fixed percentage to the cost of all items in a specific product class
target pricing
consist of (1) estimating the price that ultimate consumers would be willing to pay for a product (2) working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers and then (3) deliberately adjusting the composition and features of the product to achieve the target price to consumers
target profit pricing
Setting an annual target of a specific dollar volume of profit
target return on investment pricing
setting a price to achieve an annual target return-on-investments
target return on sales pricing
setting price to achieve a profit that is a specific percentage of the sales volume
uniform delivered pricing
the price the seller quotes includes all transportation costs
yield management pricing
The charging of different prices to maximize revenue for a set amount of capacity at any given time.