Pricing Strategies

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

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

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

A penetration pricing strategy

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

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

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

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

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

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

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

A price reduction offered by a printed promotional certificate. 

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

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

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

Fixed and variable costs combined.

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

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

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

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

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

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

This is a reduction from the original selling price.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The price at which the product is sold.

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

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

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

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

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

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