Chapter 14 MAR
price fixing
A conspiracy among firms to set prices for a product
experience curve pricing
A method of pricing based on the learning effect, which holds that the unit cost of many products and services declines by 10 percent to 10 percent each time a firm's experience at producing and selling them doubles
loss-leader pricing
Deliberately selling a product below its customary price, not to increase sales, but to attract customer's attention to it in hope that they will buy other products with large markups as well
skimming pricing
Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product
price lining
Setting the price of a line of products at a number of different specific pricing points
quantity discounts
Reduction in nit costs for a larger order
basing-point pricing
Selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer
prestige pricing
Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it
penetration pricing
Setting a low initial price on a new product to appeal immediately to the mass market
above-, at-, or below-market pricing
Setting a market price for a product or product class based on a subjective feel for the competitor's price or market price at the benchmark
customary pricing
Setting a price that is dictated by tradition, a standardized, channel of distribution, or other competitive factors
target return-on-sales pricing
Setting a price to achieve a profit that is a specified percentage of the sales volume
target profit pricing
Setting an annual target of a specific dollar volume of profit
dynamic pricing policy
Setting different prices for products and services in real time in response to supply and demand conditions
fixed-price policy
Setting one price for all buyers of a product or service. Also called a one price policy
odd-even pricing
Setting prices a few dollars or cents under an even number
standard markup pricing
Adding a fixed percentage to the cost of all items in a specific product class
promotional allowances
Cash payments or an extra amount of "free goods" awarded sellers in the marketing channel for undertaking certain advertising or selling activities to promote a product
target pricing
Consists of (1) estimating the price that ultimate consumers would be willing to pay for a product, (2) working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers, and then (3) deliberately adjusting the composition and features of the product to achieve the target price to consumers
price war
Successive price cutting by competitors to increase or maintain their unit sales or market share
cost-plus pricing
Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive to a price
FOB origin pricing
The "free on board" (FOB) price the seller quotes that includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur (seller's factory or warehouse)
bundle pricing
The marketing of two or more products in a single package price
predatory pricing
The practice of charging a very low price for a product with the intent of driving competitors out of business
price discrimination
The practice of charging different prices to different buyers for products of like grade and quality
everyday low pricing (EDLP)
The practice of replacing promotional allowances with lower manufacturer list prices
uniform delivered pricing
The price the seller quotes that includes all transportation costs
product-line pricing
The setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item
