Chapter 11
Marketing 311 with Dore at University of Oregon
About this deck
By: Alyssa Lahti
Textbook:
Principles of Marketing (13th Edition)
Created: 2012-02-26
Size: 23 flashcards
Views: 34
Textbook:
Principles of Marketing (13th Edition)Created: 2012-02-26
Size: 23 flashcards
Views: 34
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Price 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
Price Skimming Requirements
- Product quality and image must support price
- Buyers must want product at price
- costs of producing in small volume should not cancel advantages of higher prices
- competitors should not be able to enter market easily
Market-Penetration Pricing
setting a low price for a new product to attract a large number of buyers and a large market share
Market Penetration Requirements
- price sensitive market
- inverse relationship of production and distribution cost to sales growth
- low prices must keep competition out of the market
Product Mix Pricing Strategies
- Product Line Pricing
- Optional-Product Pricing
- Captive-Product Pricing
- By-Product Pricing
- Product Bundle Pricing
Product Line Pricing
setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices
Optional-Product Pricing
pricing of optional or accessory products along with a main product (i.e. car buyer may choose to order a GPS)
Captive Product Pricing
setting a price for products that must be used along with a main product (i.e. blades for a razor and games for a video game console)
By-Product Pricing
setting a price for by-products to make the main product's price more competitive; producers seek little or no profit other than the cost to cover storage and delivery
Product Bundle Pricing
combining several products and offering the bundle at a reduced price (i.e. fast-food combo meals)
Price-Adjustment Strategies
- Discount/Allowance Pricing
- Segmented Pricing
- Psychological Pricing
- Promotional Pricing
- Geographic Pricing
- Dynamic Pricing
- International Pricing
Discount Pricing
a straight reduction in price on purchases during a stated period of time or of larger quantities; used to reward customers for paying early or promoting the product
- Cash discount
- quantity discount
- functional discount
- seasonal discount
Allowance Pricing
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; allows for differences in customers, products, or locations
Psychological Pricing
considers the psychology of prices, not simply the economics; price "says something" about the product
Reference Prices
prices buyers carry in their minds and refer to when they look at a given product; noting current prices, remembering past prices, assessing the buying situation
Promotional Pricing
temporarily pricing products below the list price, and sometimes even below costs, to increase short-run sales (i.e. special event pricing, cash rebates, longer warranties)
Geographical Pricing
setting prices for customers located in different parts of the country or world
Dynamic Pricing
adjusting prices continually to meet the characteristics and needs of individual customers and situations
Factors that Initiate Price Cuts
excess capacity, falling demand due to strong price competition or weakened economy, attempt to dominate market through lower costs
Factors that Initiate Price Increases
cost inflation
Buyer Reactions to Price Changes
- price increase, normally lowers sales, but in some cases may make consumers think product is more exclusive or higher in quality
- price cut, normally increases demand, but in higher end goods may tarnish consumers' perception of brand
Competitor Reactions to Price Changes
competitors most likely to react when number of firms involved is small, when product is uniform, and when buyers are well informed about products and prices
About this deck
By: Alyssa Lahti
Textbook: Principles of Marketing (13th Edition)
Created: 2012-02-26
Size: 23 flashcards
Views: 34
Textbook:
Principles of Marketing (13th Edition)Created: 2012-02-26
Size: 23 flashcards
Views: 34
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“Simply amazing. The flash cards are smooth, there are many different types of studying tools, and there is a great search engine. I praise you on the awesomeness.”
Dennis
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