Marketing chapter 11

discount

A straight reduction in price on purchases during a stated period of time or of larger quantities

Developing a product and selling it at a reasonably low margin because additional purchases can be made using that product. A firm will use this pricing strategy to capture additional profits? EX: Amazon developing the Kindle electronic book and they know profits will be made when books/magazines are purchased.

Captive product pricing

Selling something at an extremely low price, in the hopes of attracting many consumers to capture a greater value of market share is called?

Promotional pricing

When using price steps, the seller must establish perceived ________ that support the price differences.

Quality differences

Market-skimming pricing

a strategy with high initial prices to "skim" revenue layers from the market

dynamic pricing

adjusting prices continually to meet the characteristics and needs of individual customers and situations

International pricing

adjusting prices for international markets

psychological pricing

considers the psychology of prices and not simply the economics; the price is used to say something about the product

promotional pricing

temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales

geographical pricing

used for customers in different parts of the country or the world

Pricing Strategies

International pricing, discount and allowance, segmented, geographical, dynamic, physcholgical, promotional

Many producers who use captive-product pricing set the price of the main product ________ and set _________________ on the supplies necessary to use the product.

Low; high mark ups

When introducing a new product, a company can choose market-skimming pricing. Which strategy discussed could be an alternative strategy?

Market penetration

If in the early periods of the introduction of something, the prices are extremely high, what strategy is being used?

Price skimming

A firm does not set a single price but instead what concept can they use to determine pricing ?

Pricing structure

segmented pricing

involves selling a product or service at two or more prices, where the difference in prices is not based on differences in costs

market penetration pricing

setting a low price for a new product in order to attract a large number of buyers and a large market share

captive product pricing

setting a price for products that must be used along with a main product, such as blades for a razor and games for a video-game console

optional product pricing

takes into account optional or accessory products along with the main product

product line pricing

takes into account the cost differences between products in the line, customer evaluation of their features, and competitors' prices

A challenge for management in product line pricing is to decide on the price steps between?

Various products in a line