Chapter 10: Pricing Decisions
External Reference Price
A comparison price provided by others
Allowance
A concession in price to achieve a desired goal
Demand Curve
A graph of the quantity of a product taken by buyers in the market at various prices, given that all other factors are held constant
Internal Reference Price
A price developed in the buyer's minds through experience with the product
Seasonal Discount
A price reduction given to buyers for purchasing goods or services out of season
Trade (Functional) Discount
A reduction off the list price given by a producer to an intermediary for performing certain functions
Cost-Plus Pricing
Adding a specified dollar amount or percentage to the seller's cost. Also known as markup pricing
Special-Event Pricing
Advertising sales or price cutting linked to a specific event
Differential Pricing
Charging different prices to different buyers for the same quality and quantity of product
Price Skimming
Charging the highest possible pricing that buyers who most desire the product will pay
Value-Conscious
Concerned about price and quality of a product
Quantity Discounts
Deductions from list price for purchasing large quantities
Prestige Sensitive
Drawn to products that signify prominence and status
Non-Price Competition
Emphasising factors other than price to distinguish a product from competing brands
Price Competition
Emphasising price and matching or beating competitor's prices
Odd-Even Pricing
Ending the price with certain numbers to influence buyer's perceptions of the price or product
Negotiated Pricing
Establishing a final price through bargaining
Product-Line Pricing
Establishing and adjusting prices of multiple products within a product line
Professional Pricing
Fees set by people with great skill or experience in a particular field
Pricing Objectives
Goals that describe what a company wants to achieve through pricing
Bundle Pricing
Packaging together two or more complementary products and selling them for a single price
Multiple-Unit Pricing
Packaging together two or more identical products and selling them for a single price
Cash Discount
Price reduction gives to buyers for prompt payment or cash payment
Reference Pricing
Pricing a product at a moderate level and displaying it next to a more expensive model or brand
Bait Pricing
Pricing an item in the product line low with the intention of selling a higher-priced item in the line
Value-Based Pricing
Pricing based on the level of benefits the product offers
Competition-Based Pricing
Pricing influenced primarily by competitors prices
Customary Pricing
Pricing on the basis of tradition
Psychological Pricing
Pricing that attempts to influence a consumer's perception of a price to make a product's price more attractive
Captive Pricing
Pricing the basic product in a product item low while pricing related items at a higher level
Premium Pricing
Pricing the highest-quality or most versatile products higher than other models in the product line
Price Leader
Product priced below the usual markup, near cost or below cost
Tensile Pricing
Refers to a broad statement about price reductions as opposed to detailing specific price discounts
Price Lining
Setting a limited number of prices for selected groups or lines of merchandise
Everyday Low Prices (EDLP)
Setting a low price for products on a consistent basis
Comparison Pricing
Setting a price at a specific level and comparing it with a higher price
Secondary-Market Pricing
Setting one price for the primary target market and a different price for another market
Penetration Pricing
Setting price below those of competing brands to penetrate a market and gain a significant market share quickly
Prestige Pricing
Setting prices at an artificially high level to convey prestige or a quality image
Price-Conscious
Striving to pay low prices
Random Discounts
Temporary reduction of prices on an unsystematic basis
Periodic Discounts
Temporary reductions of prices on a patterned or systematic basis
Price
Value exchanged for products in a marketing transaction