Mymaketinglab Ch. 9
first
Designing a good product is the __________ step in cost-based pricing.
value-added pricing
attaching features and services to differentiate a company's offers and charging higher prices.
Customer value-based pricing
is based on a buyer's perceptions of value rather than on the seller's cost.
Good-value pricing
is offering just the right combination of quality and good service at a fair price.
Market-skimming 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
Product line pricing
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.
Price
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
Designing products to deliver the desired value at a target price
is the fourth step in value-based pricing
Setting a target price to match the customer's perceived value
is the second step in value-based pricing.
Determining costs that can be incurred
is the third step in value-based pricing.
Fixed costs
is/are costs that do not vary with production or sales level.
Variable costs
is/are costs that vary directly with the level of production
Total costs
is/are the sum of the fixed and variable costs for any given level of production.
Target costing
pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met.
Cost-based pricing
setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk
A demand curve
shows the number of units the market will buy in a given time period, at different prices that might be changed.
Price elasticity
a measure of the sensitivity of demand to changes in price.
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.
psychological pricing
the price is used to say something about the product.