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Pricing
Term | Definition |
---|---|
Price Discrimination | The practice of charging different buyers different prices for the same quantity and quality of products or services. |
Market Share | The percentage of a market accounted for by a specific entity. |
Return On Investment (ROI) | Profits in relation to capital invested. |
Cost Based Pricing | Fixed sum or a percentage of the total cost added to the cost of the product. |
Demand Based Pricing | Seller attempts to set price at the level the intended buyers are willing to pay. |
Flexible Price Policy | Selling at different prices to different customers. |
One Price Policy | All customers pay the same price for an item of merchandise. |
Psychological Pricing | Prices intended to have special appeal to customers. |
Prestige Pricing | Higher than average prices to suggest status and high quality. |
Odd/ Even Pricing | A form of Psychological Pricing that suggests buyers are more sensitive to certain ending digits. |
Price Lining | A limited number of predetermined price points. |
Promotional Pricing | Prices are reduced for a short time during a sales promotion. |
Cash Discounts | A premium for advance payment at a rate that is higher than the rate of interest. |
Quantity Discounts | A reduction in price for volume purchases. |
Trade Discounts | Discount allowed to a class of customers on a list price before credit terms. |
Promotional Discounts | Allowance given by vendors to retailers to compensate for money spent in advertising an item. |
Seasonal Discounts | Special discount to all retailers who place orders for seasonal merchandise in advance of normal buying period. |
Skimming Pricing | Pricing that attmepts to first reach those willing to buy at a high price before marketing to more price sensitive customers. |
Penetration Pricing | Sets low initial price in an attempt to increase market share rapidly. |
Price | Ratio that indicates the quantities of money goods or services needed for a given quantity of goods. |
Market Position | Customer's perceptions of the place a product or brand occupies in a market segment. |
Cost | Money expended to produce and market a product. |
Markup | Difference between merchandise cost and the retail price. |
Margin | Difference between the selling price and total unit costs. |
Markdown | Amount of reduction from selling price. |
Break Even Point | Sales volume at which total revenues are equal to total costs. |
Elasticity | Degree that an economic variable changes in response to a change in another economic variable. |
Price Competition | Rivalry among firms seeking to attract customers on the basis of price. |
Nonprice Competition | Rivalry based on quality of service, distribution, and promotion that boasts the benefits of their product. |
Price Fixing | Two or more sellers agreeing on the price to charge for similar products. |