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 at 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 buyers mind through experience with a product
Seasonal Discounts
A price reduction given to buyers for purchasing goods or services out of season
Trade (Functional) Discounts
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 a markup pricing
Markup pricing
Adding to the cost of the product a predetermined percentage of the cost
Special-event pricing
Advertised sales or price cutting linked to a special event
Differential pricing
Charging different prices to different buyers for the same quality and quantity of product
Price Skimming
Charging the highest possible price that buyers who most desire the product will pay
Value-conscious
Concerned about quality and price of a product
Quantity discounts
Deductions from the 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 buyers 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 Discounts
Price reduction given 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 iten 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 pricing
Customary pricing
Pricing on the basis of tradition
Psychological pricing
Pricing that attempts to influence a customer's perception of price to make a products price more attractive
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 a specific price discounts
Price Lining
Setting a limited number of prices for selected groups of lines of merchandise
Everyday low prices
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
Prestige pricing
Setting prices at an artificially high level to convey prestige or a high quality image
Penetration pricing
Setting prices below those of competing brands to penetrate a market and gain significant market share quickly
Price conscious
Striving to pay low prices
Periodic discounts
Temporary reduction of prices on a patterned or systematic basis
Random discounts
Temporary reduction of prices on an unsystematic basis
Price
Value exchanged for products in a marketing transaction
