16 terms

Ch 20 - Price

price competition
flexibility (can be adjusted)
competitors have this flexibility too! can spark P war and weaken co.
nonprice competition
focuses on features, service, quality, promotion, etc. co must have strong brand
builds strong customer loyalty
marginal cost
extra cost a firm incurs when it produces 1 more unit of a product
marginal revenue
change in total rev when firm sells another unit of a product
internal reference point
P developed in buyer's mind through past experience
external reference point
comparison P made by retailer
care about P and quality
just care about low P
buy products that signify status
cumulative discount
quantity discount aggregated over time
concession in P to ACHIEVE a desired goal
F.O.B. factory
P is the P of the merchandise at the factory.
BUYER pays shipping
F.O.B. destination
PRODUCER pays shipping
base-point pricing
geo P policy that includes the P at factory plus freight charges from base point nearest the buyer
freight absorption pricing
seller absorbs all or part of actual freight costs for a PARTICULAR customer
transfer pricing
when 1 unit in a co sells to another unit