Term
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Definition
______ is the amount of money charged for a product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service.
Also, ______ is the only element in the marketing mix that produces revenue; all other elements represent costs |
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Term
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Definition
________ uses the buyers’ perceptions of value, not the seller’s cost, as
the key to pricing. Price is considered before the marketing program is set.
• _______ is customer driven |
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Term
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Definition
_____ involves setting prices
based on the costs for producing,
distributing, and selling the product plus a fair rate of return for its effort and risk.
• ______ is product driven
_____ adds a standard markup
to the cost of the product
Ex: 10% |
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Term
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Definition
is a strategy with high initial prices to “skim” revenue layers from the market
• Product quality and image must support the price
• Buyers must want the product at the price
• Costs of producing the product in small volume should not cancel the advantage of higher prices
• Competitors should not be able to enter the market easily |
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Term
| Market penetration pricing |
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Definition
_______ sets a low initial price in
order to penetrate the market quickly and deeply to attract a large number of buyers quickly to gain market share
• Price sensitive market
• Inverse relationship of production and distribution cost to sales growth
• Low prices must keep competition out of the market |
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Term
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Definition
| _______ takes into account the cost differences between products in the line, customer evaluation of their features, and competitors’ prices – ex: GAP Inc. |
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Term
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Definition
| ______ takes into account optional or accessory products along with the main product – ex: Buying a car |
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Term
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Definition
| ______ involves products that must be used along with the main product – ex: Gillette or Polaroid. |
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Term
| Price Adjustment Strategies |
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Definition
These 4 are ____.
Quantity Discount
Seasonal Discount
Timing Discount
Promotional Discount |
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Term
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Definition
(Price Adjustment Strategies)
reduces prices to buyers who buy large volumes
Ex: Costco |
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Term
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Definition
(Price Adjustment Strategies)
______ reduces prices to buyers
who purchase merchandise or services out
of season
Ex: Christmas things after holidays
Swimwear after summer |
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Term
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Definition
(Price Adjustment Strategies)
______ reduces prices to buyers based on month, day, even hour.
Ex: Movie theaters – matinee pricing
Cell phones |
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Term
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Definition
_____ temporarily reduces prices below list price to increase short-run sales.
Ex: Airline tickets |
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