Marketing 20

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  1. Price Strategy
    a basic, long-term pricing framework, which establishes the initial price for a product and the intended direction for price movements over the product life cycle
  2. Price Skimming
    a firm charges a high introductory price, often coupled with heavy promotion
  3. Penetration Pricing
    a firm charges a relatively low price for a product initially as a way to reach the mass market
  4. Status Quo Pricing
    Charging a price identical to or very close to the competition's price
  5. Price Fixing
    an agreement between 2 or more firms on the price they will charge for a product
  6. Predatory Pricing
    practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market
  7. Base Price
    the general price level at which the company expects to sell the good or service
  8. Tactics for Fine-Tuning the Base Price
    • 1) Discounts
    • 2) Geographic Pricing
    • 3) Special pricing tactics
  9. Quantity Discount
    price reduction offered to buyers buying in multiple units or above a specified dollar amount
  10. Cash Discounts
    price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill.
  11. Functional Discount (trade discount)
    discount to wholesalers and retailers for performing channel functions
  12. Seasonal Discounts
    price reduction for buying merchandise out of season
  13. Promotional Allowances (trade allowance)
    a payment to a dealer for promoting the manufacturers products
  14. Rebates
    cash refund given for the purchase of a product during a specific period
  15. Value-Based Pricing
    setting the price at a level that seems to the customer to be a good price compared to the prices of other options
  16. FOB Origin Pricing
    • buyer absorbs the freigh costs from the shipping point
    • -buyer responsible for all shipping costs (insurance too)
  17. Uniform Delivered Pricing
    seller pays the freight charges and bills the purchaser an identical, flat freight charge
  18. Zone Pricing
    The U.S. is divided into zones, and a flat freight rate is charged to customers in a given zone
  19. Freight Absorption Pricing
    seller pays for all or part of freight charges and does NOT pass them on to the buyer
  20. Basing-Point Pricing
    seller designates a location as a basing point and charges all buyers the freight costs from that point
  21. Single-Price Tactic
    • all goods offered at the same price
    • Ex: subway
  22. Flexible Pricing
    different customers pay different price
  23. Professional Services Pricing
    Used by professionals with experience, training, or certification Ex: dentist
  24. Price Lining
    • several line items at specific price points
    • Ex: walmart, family dollar
  25. Leader Pricing
    • sell product at near or below cost
    • Ex: buy 1 get 1
  26. Bait Pricing
    lure customers through false or misleading price advertising. illegal
  27. Odd-Even Pricing
    • O- number prices imply bargain (9.99)
    • E- number prices imply quality (10.00)
  28. Price Bundling
    combining two or more products in a single package
  29. Two Part Pricing
    • 2 seperate charges to consume a single good
    • Ex: cell phone service cost plus another fee for data, etc.
Card Set
Marketing 20
Marketing 20
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