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Chp. 9 Marketing
| Question | Answer |
|---|---|
| Price | The amount of money charged for a product or service, or the sum of all the values that customers give up in order to gain the benefits of having or using a product or service. |
| Value-based pricing | Setting price based on buyers' perceptions of value rather than on the seller's cost. |
| Good-value pricing | Offering just the right combination of quality and good service at a fair price. |
| Value-added pricing | Attaching value-added features and services to differentiate a market offering and support higher prices, rather than cutting prices to match competitors. |
| Cost-based pricing | Setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for its effort and risk. |
| Fixed costs | Costs taht do not vary with production or sales level. |
| Variable costs | Costs that vary directly with the level of production. |
| Total costs | The sum of the fixed and variable costs for any given level of production. |
| Cost-plus pricing | Adding a standard markup to the cost of the product. |
| Break-even pricing (target profit pricing) | Setting price to break even on the costs of making and marketing a product; or setting price to make a target profit. |
| Target costing | Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met. |
| Demand curve | A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged. |
| Price elasticity | A measure of the sensitivity of demand to changes in price. |
| Market-skimming pricing 9price skimming) | 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. |
| 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. |
| 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 on purchases under stated conditions or 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. |
| Geographical pricing | Setting price based on the buyer's geographic location. |
| Dynamic pricing | Adjusting prices continually to meet the characteristics and needs of individual customers and situations. |
| Price fixing | sellers must set prices without talking to competitors |
Created by:
tgrant01
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