| A | B |
|---|
| Cash discounts | Discounts offered to buyers as an incentive for paying the invoice amount within a specified number of days. |
| Competition | A rivalry between businesses to attract scarce consumer dollars. |
| Cost of merchandise sold | The amount paid by a business for products purchased for resale or for use in the production of other goods |
| Cost-oriented pricing | Implemented by carefully examining all of the costs associated with carrying a product and selling it to consumers then adding the desired profit to arrive at a selling price. |
| Cost-plus pricing | A pricing strategy that examines costs for individual products or services and adds a standard markup |
| Cumulative quantity discounts | Based on a buyer’s total purchases during a specified period of time |
| Demand | The number of products consumers are willing to buy at a given time and a given price |
| Demand oriented pricing | Most effective when selling products with inelastic demand, this pricing strategy requires price planners to estimate the value customers place on products and set prices accordingly |
| Direct competition | Competition between businesses that have similar formats and sell similar products |
| Elastic demand | Demand that is sensitive to a change in price of the product |
| Fixed costs | Costs that remain constant over a period of time regardless of sales volume. |
| Fixed pricing | A policy under which an organization charges the same prices to all customers regardless of the quantity of the purchase |
| Indirect competition | Competition between businesses that have dissimilar formats and sell dissimilar products |
| Inelastic demand | Demand that is not sensitive to a change in price of the product. |
| Loss leaders | A product that is sold below costs in an effort to increase customer traffic. |
| Markdowns | Reductions in selling price used to stimulate sales, dispose of slow moving/discontinued merchandise, meet competitors’ prices, and/or increase customer traffic. |
| Market price | The price that prevails in the market for a particular good at a specific time. |
| Markup pricing | Pricing strategy that adds a predetermined percentage to the cost of products. |
| Non-price Competition | Competition based on factors other than price as a means to attract customers |
| Non-cumulative quantity discounts | Reductions given to buyers for a one-time purchase or shipment. |
| 21. Odd/even cent pricing | Psychological pricing technique based on the principle that prices ending in odd numbers ($5.99) communicate a bargain and prices ending in even numbers ($6.00) communicate quality. |
| Opportunity cost | The opportunity cost is the option that is given up when a consumer chooses one product/service over another. |
| Penetration pricing | Setting a low price when introducing a product into a competitive market to motivate customers to purchase. |
| Prestige pricing | Pricing technique that sets a higher-than-average price for products in order to communicate quality and status |
| Price | The amount charged to customers in exchange for goods and services |
| Price Competition | Competition that uses price as the primary means to attract customers. |
| Price lining | Establishing price points between products in a product line to communicate differences in quality and/or service to consumers |
| Profit | Revenue remaining after the expenses of running the business have been deducted from income |
| Promotional pricing | Selling a product at a temporarily lower price in order to attract customers. |
| Psychological pricing | Pricing technique based on the belief that customers form their perceptions of products on price and these perceptions affect customer buying decisions. |
| Quantity discounts | Reduction in price given by manufacturers/ wholesalers when a large or specified quantity is purchased |
| Skimming pricing | Setting a high price when introducing a product that has little competition and will appeal to customers who like to be the first to have the latest products. |
| Supply: | The number of products manufacturers are willing to produce at a given time and at a given price |
| Trade discounts | Discounts offered to channel members for performing certain functions like storing or record keepin |
| Unit pricing | Stating the price of a product per unit of standard measure |
| Variable costs | Costs that vary based on sales volume or changes in business needs. |
| Variable pricing | Pricing technique that encourages customers to bargain with sellers in an effort to obtain the best price for products and services. |
