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Princ. of Marketing
Kotler, Armstrong, Principles of Marketing 11th ed, Ch 11 vocab
Question | Answer |
---|---|
Market-skimming pricing | 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 |
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 |
Product line pricing | 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 |
Optional-product pricing | The pricing of optional or accessory products along with a main product |
Captive-product pricing | Setting a price for products that must be used along with a main product, such as blades for a razor or film for a camera |
By-product pricing | Setting a price for by-products in order to make the main product’s price more competitive |
Product bundle pricing | Combining several products and offering the bundle at a reduced price |
Discount | A straight reduction in price during a stated period of time |
Allowance | Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer’s products in some way |
Segmented pricing | Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs |
Psychological pricing | A pricing approach that considers the psychology of prices and not simply the economics—the price is used to say something about the product |
Reference prices | Prices that buyers carry in their minds and refer to when they look at a given product |
Promotional pricing | Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales |
FOB-origin pricing | A geographical pricing strategy in which goods are placed free on board a carrier—the customer pays the freight from the factory to the destination |
Uniform-delivered pricing | A geographical pricing strategy in which the company charges the same price plus freight to all customers, regardless of their location |
Zone pricing | A geographical pricing strategy in which the company sets up 2 or more zones. All customers within a zone pay the same total price—the more distant the zone, the higher the price. |
Basing-point pricing | A geographical pricing strategy in which the seller designates some city as a basing point and charges all customers the freight cost from that city to the customer |
Freight-absorption pricing | A geographical pricing strategy in which the seller absorbs all or part of the freight charges in order to get the desired business |