Marketing Chapter 11
Marketing Skimming Pricing
A strategy with high initial prices to skim maximum revenues from the segments willing to pay the high price
Cost Plus Pricing
Adds a standard mark-up to the cost of the product
Dynamic Pricing
Adjusting prices continually to meet the characteristics and needs of individual customers and situations
International Pricing
Adjusting prices for international markets
Geographical Pricing
Adjusting prices to account for geographical location of customers
Segmented Pricing
Adjusting prices to allow for difference in customers, products or locations
Psychological Pricing
Adjusting prices to psychological effect
Value Based Pricing (1)
Assess customer needs and value perceptions
Value Added Pricing
Attaching value added features and services to differentiate a company's offerings and charging high prices
Product Bundle Pricing
Combines several products at a reduced prices
Cost Based Pricing (4)
Convince buyers of products value
Cost Based Pricing (1)
Design a good product
Value Based Pricing (4)
Design product to deliver desired value at target price
Value Based Pricing (3)
Determine costs that can be incurred
Cost Based Pricing (2)
Determine product costs
Captive Product Pricing
Involved products that must be used along with the main product
Two Part Pricing
Involves breaking the price into: fixed fee, variable usage fee
Cost Based Pricing
Involves setting prices based on the costs for producing, distributing and selling the product plus a fair rate of return for its effort and risk
Good Value Pricing
Offering just the right combination of quality and good service at a fair price
Discount and Allowance Pricing
Reducing prices to reward customer responses such as paying early or promoting the product
By Product Pricing
Refers to products with little or no value produced as a result of the main product
Cost Based Pricing (3)
Set price based on cost
Value Based Pricing (2)
Set target price to match customer perceived value
Marketing Penetration Pricing
Sets a low initial price in order to attract a large number of buyers and large market share
Optional Product Pricing
Takes into account optional or accessory products along with the main product
Product Line Pricing
Takes into account the cost difference between products in the line, customer evaluation of their features and competitors pricing
Promotional Pricing
Temporarily reducing prices to increase shot run sales
Fixed Costs
The costs that do not vary with production or sales level
Variable Costs
The costs that vary with the level or production
Target Profit Pricing
The price at which the firm will break even or make the profit it's seeking
Break Even Pricing
The price at which total costs are equal to total revenue and there is no profit
Total Costs
The sum of the fixed and variable costs for any given level of production
Value Based Pricing
Uses the buyer' perceptions of value, not the seller's cost, as the key to pricing