| A | B |
|---|
| Price | the value in money (or equivalent) placed on a good or service |
| Value | a matter of anticipated satisfaction |
| Return on investment | a calculation used to determine the relative profitability of a product. |
| Market share | a firm’s percentage of the total sales volume generated by all competitors in a given market |
| Break-Even Point | the point at which sales revenue equals the cost and expenses of making and distributing a product |
| Demand Elasticity | the degree to which demand for a product is affected by its price |
| Elastic Demand | refers to situations in which a change in price creates a change in demand |
| Law of Diminishing Marginal Utility | states that consumers will buy only so much of a given product, even though the price is low |
| Inelastic Demand | refers to situations in which a change in price has very little effect on demand for a product |
| Price Fixing- | when competitors agree on certain prices ranges within which they set their own prices |
| Prices Discrimination | when a firm charges one customer one price and another customer a different price if both customers are buying the same product in similar situations |
| Unit Pricing | allows consumers to compare prices in relation to a standard unit or measure |
| Resale Price Maintenance | manufacturers cannot punish retailers for selling products at lower than suggested prices |
| Minimum Price Law | Some states have laws for the minimum amount allowed to charge someone for a product |
| Loss leader | when an item is priced at or below cost to draw customers into a store |
| cost-oriented pricing | marketers first calculate the costs of acquiring or making a product and their expenses of doing business; then they add their projected profit margin to these figures to arrive at a price |
| Markup pricing | resellers add a dollar amount to their cost to arrive at a price |
| Cost-plus pricing | all costs and expenses are calculated, and then the desired profit is added to arrive at a price |
| Demand-Oriented Pricing | to determine what consumers are willing to pay for given goods and services |
| Competition-Oriented Pricing | Marketers can price above competition, price below competition, or price in line with competition |
| One-Price Policy | one in which all customers are charged the same prices |
| Flexible –Price Policy | one in which customers pay different prices for the same type or amount of merchandise |
| Skimming pricing | a pricing policy that sets a very high price for a new product |
| Penetration Pricing | the price for a new product is set very low |
| Price lining | a special pricing technique that sets a limited number of prices for specific groups or lines of merchandise. |
| Option Product | involves setting prices for accessories or options sold with the main product |
| Captive Product | sets the price for one product low but compensates for that low price by pricing the supplies needed to operate the product high |
| By-Product | helps a business get rid of excess materials used in making a product by using low prices |
| Bundle Pricing | a company offers several complementary products in a package that is sold at a single price |
| Geographical pricing | refers to price adjustments required because of the location of the customer for delivery of products |
| International Pricing | need to take into consideration costs, consumers, economic conditions, and the monetary exchange rate. |
| Buyer Identification | recognizing a buyer’s sensitivity to price |
| Product Design | different prices for different product designs |
| Purchase Location | pricing according to where a product is sold and/or the location of the good or service |
| Time of Purchase | charging more during peak time |
| Psychological pricing | pricing techniques that help create an illusion for customers |
| Odd-even pricing | setting a prices that all end in either odd or even numbers |
| Prestige pricing | sets higher-than-average prices to suggest status and high quality to the consumer |
| Multiple-Unit Pricing | pricing items in multiples for one price |
| Everyday Low Prices | low prices set on a consistent basis with no intention of raising them or offering discounts in the future. |
| Loss Leader Pricing | used to increase store traffic by offering very popular items of merchandise for sale at below-cost prices |
| Special-Event | items are reduced in price for a short period of time based on specific happenings |
| Rebates and coupons | partial refunds provided by the manufacturer to the consumer |
| Promotional Pricing | generally used in conjunction with sales promotions where prices are reduced for a short period of time. |
