MKT CH9 Terms

__________ is 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.

Captive-product pricing

__________ is the fourth step in cost-based pricing.

Convincing buyers of a product's value

__________ is the first step in cost-based pricing. Although costs are an important consideration in setting prices, cost-based pricing is often product driven. The company designs what it considers to be a good product, adds up the costs of making the product, and sets a price that covers costs plus a target profit.

Designing a good product

__________ is the fourth step in value-based pricing.

Designing products to deliver the desired value at a target price

__________ is the third step in value-based pricing.

Determining costs that can be incurred

__________ is the second step in cost-based pricing.

Determining product costs

__________ adjusts prices continually to meet the characteristics and needs of individual customers and situation.

Dynamic pricing

__________ is/are costs that do not vary with production or sales level.

Fixed costs

__________ is/are the sum of the fixed and variable costs for any given level of production.

Total costs

With ________, the price is used to say something about the product.

psychological pricing

__________ is the first step in value-based pricing.

Assessing the customer needs and value perceptions

__________ is setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk.

Cost-based pricing

__________ is setting a price based on a buyer's perceptions of value rather than on the seller's cost.

Customer value-based pricing

__________ is offering just the right combination of quality and good service at a fair price.

Good-value pricing

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

Market-penetration pricing

__________ is setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales. The new product pricing strategy of ______ means the initial price is set high.

Market-skimming pricing

__________ is the amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service.

Price

__________ is a measure of the sensitivity of demand to changes in price.

Price elasticity

__________ is setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices.

Product line pricing

__________ refers to temporary price reductions to spur on short-run sales.

Promotional pricing

__________ refers to prices that allow for differences in customers, products, or locations.

Segmented pricing

__________ based on cost is the third step in cost-based pricing.

Setting the price

__________ is the second step in value-based pricing.

Setting the target price to match a customer's perceived value

__________ is/are pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met.

Target costing

__________ is attaching features and services to differentiate a company's offers and charging higher prices.

Value-added pricing

__________ is/are costs that vary directly with the level of production.

Variable costs

A __________ shows the number of units the market will buy in a given time period, at different prices that might be charged.

demand curve