Pricing Strategies

The costs to the business that do not change no matter how many products are produced.

Law of diminishingmarginal utility: we will buy only so much of a product even if price is low

This pricing strategy includes a combination of several related services for one price.

Price is an important tool because it can be changed quicker than other marketing decision.

High taxes on tobacco and alcohol products are designed to primarily raise money.

The quantity of the product that will be sold multiplied by the product’s selling price.

The business studies the target market to determine how much customers will pay.

Setting a high price because customers believe an expensive product is a high quality product.

A penetration pricing strategy

This pricing policy allows customers to negotiate the price of the product.

Offered to customers who buy during times when normal sales are low.

Most products have elastic demand and will experience a change in demand when price changes.

The minimum price includes all production, marketing, and administrative costs.

A pricing strategy refers to techniques that create an illusion for customers.

This is the value of money (or its equivalent) placed on a good or service:

Pricing strategy involving setting higher-than-average prices to suggest status and prestige.

The difference between selling price and all costs and expenses of the product sold. 

A price reduction offered by a printed promotional certificate. 

This protects the inventor of a new product from competition for a period of 20 years.

Fixed and variable costs combined.

Reduction in price for customer's old product when a new one is purchased

Those costs that are directly related to the quantity of the product produced.

The price at which the product is sold.

Pricing strategy where prices are set in categories based on differences in quality & features.

When a large supply of a product exists and the demand is low; the price will also be low.

This is a reduction from the original selling price.

Insulin for a diabetic is a necessity and has no substitutes. The demand for insulin is:

This is a tax charged on retail sales receipts and added to the selling price by retailers.

In this objective of pricing the business wants to have the highest possible sales volume.

This is a reduction in a price given to the customer.

Subtract total costs from projected total revenue to determine the variable costs.

This pricing strategy prices items at cost to attract customers into the store.

Occurs when there is a small supply of a product but large demand; the price will be high.

Steak is NOT a necessity and has many substitutes. The demand for steak is:

Elasticity of demand describes the relationship between changes in a product's price and demand

A strategy that sets low prices with no intention of raising them or offering discounts.

A company lures customers with low prices then tells them the low-priced product is unavailable

Government sometimes lowers taxes to encourage the use of a product like ethanol.

The quantity of a product that must be sold for revenues to match total costs.

The gross margin is the difference between the cost of the product and the selling price.

 A pricing strategy that involves pricing in multiples to suggest a bargain and increase sales.

A pricing strategy where prices are reduced for a short period of time, such as a holiday sale.

Specific amount of money returned to the customer after the purchase is made.    

The difference between the cost of the product and the selling price is known as

This is an amount added to the cost of a product to determine the selling price.