MKT Final Part 1 (Pricing)

pricing strategy: odd-even pricing

Ending the price with certain numbers to influence buyers' perceptions of the price or product

pricing strategy: bundle pricing

Packaging together two or more complementary products and selling them for a single price

pricing strategy: multiple-unit pricing

Packaging together two or more identical products and selling them for a single price

pricing strategy: single-price

all customers are charged the same price for all the goods and services offered for sale within that product category

Pricing Strategy: reference pricing

positioning a product at lower price and positioning it next to a more expensive model or brand. - selling against the brand

inelastic (price insensitive)

price change causes little change in demand price increase = increase revenue

pricing strategy: leader pricing

Also known as loss leader pricing, products priced below the usual markup, near cost, or below cost

Pricing Strategy: everyday low prices

- consistent low prices

select a basis for pricing

- cost (Mark up and breakeven) - demand (Flexible/variable: off peak, different prices) - competition - new product

Developing Pricing Objectives

- profit - status quo - market share

Internal Factors of price

1. Marketing Objectives 2. Marketing Mix Strategy 3. Costs

External factors of price

1. demand for your product 2. competition 3. economy

pricing strategy: captive-product pricing

Captive products are items designed specifically for use with another product examples: razor and shaving creme

New Product Pricing Strategies (Market penetration)

Good value = lower price, higher quality Economic Strategy = Lower price, Lower quality

pricing strategy: bait pricing

Illegal practice of advertising unrealistically low prices to bring customers into the store

New Product Pricing Strategies (Market Skimming)

Premium = higher price, higher quality overcharging = higher price, lower quality

Pricing Strategy: portfolio pricing

different levels of price points across a product category where customers are willing to pay more for extras

Elastic (price sensitive)

price change causes great change in demand - Price increase = decrease revenue