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CLEP Marketing - Selling and Pricing Strategy pt 2
Terms in this set (32)
cost varies with output
costs that don't change with output
FC / Q
ATC / Q
VC / Q
AVC + AFC
change in total cost associated with one unit change in output
less output is produced for every additional dollar spent on variable output.
MC = MR
Profit Maximization occurs
determined by adding the cost from the producer with the amounts for profit and expenses.
determining what sales volume must be reached before total revenue equals total costs.
the extra revenue associated with selling an extra unit of output
sets the initial price of the product and provides a plan for price changes over time.
charging high intro price in tandem w/ heavy promotion and later slowly dropping the price (used for strong unique products)
charging a low price initially in order to reach the largest amount of their target market
(the more ppl that buy the more sales; best for price sensitive, non-prestigious brands)
Status Quo Pricing
matching competitors' pricing or charging close to the competition
short term decreases in price that are used to get customers to purchase more product, pay cash rather than credit, or take delivery at different time periods.
Discounts offered to encourage customers to buy in larger amounts
a price reduction offered to a customer in return for prompt payment of a bill
When seller discounts price based on buyer channel position, size, or market position.
offered to buyers willing to buy at a time outside the customary buying season
a payment to a dealer for promoting the manufacturer's products (targets trade not consumer)
A cash refund given for the purchase of a product during a specific period
use discounts, rebates, and allowances to
temporarily change the price to increase sales and profits.
A rise in the general level of prices
Delay Quotation Pricing
not pricing a product until its finished or delivered (car manufacturers)
which the final selling price reflects cost increases incurred between the time the order is placed and the time delivery is made (wedding cake estimates)
fees can be used to
to help offset inflationary concerns
period of reduced economic activity
communicate to customers that they are receiving a great deal for their money (reduced price on day-old bakery goods)
getting a good value by receiving extras with their purchase
eliminating products with low margins, using delay quotation pricing or escalator pricing and adding new fees
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