Marketing Final Chapter 17

Price

the amount of money that is charged for something of value

target return objective

sets a specific level of profit as an objective

profit maximization objective

seeks to get as much profit as possible

benefit corporation

a legal corporate structure that allows for goals that may include positive impacts on society, employees, the community, and the environment

B Corporation certification

a private certification that it meets a high standard for social and environmental performance

sales oriented objective

seeks some level of unit sales, dollar sales, or share of market without referring to profit

status-quo objectives

don’t rock the pricing boat objectives.

nonprice competiton

aggresive action on one or more of the P’s other than price

administered prices

consciously set prices. instead of letting daily market forces decide their prices, most firms set own prices

one price policy

offering the same price to all customers who purchase products under essentially the same conditions in the same quantities

flexible price policy

offering the same product and quantities to different customers at different prices

dynamic pricing

pricing products at a particular customer’s perceived ability to pay

skimming price policy

tries to sell the top of a market, the top of the demand curve at a high price before aiming at more price sensitive customers

penetration pricing policy

tries to sell the whole market at one low price

introductory price dealing

temporary price cuts to speed new products into a market and get customers to try them

basic list prices

the prices final customers or users are normally asked to pay for products

discounts

reductions from list price given by a seller to buyers who either give up some marketing function or provide the function to themselves

quantity discounts

discounts offered to encourage customers to buy in larger amounts

cumulative quantity discounts

purchases over a given period such as a year, and the discount usually increases as the amount purchased increases

noncumulative quantity discounts

apply only to individual orders, do not tie a buyer to a seller after one purchase

seasonal discounts

discounts offered to encourage buyers to buy earlier than present demand requires

net

payment for the face value of the invoice is due immediately

cash discounts

reductions in price to encourage buyers to pay their bills quickly

2/10, net 30

means the buyer can take a 2 percent discount off the face value of the invoice if the invoice is paid within 10 days

trade (functional) discount

list price reduction given to channel members for the job they are going to do

allowances

like discounts, given to final consumers, business customers, or channel members for doing something or accepting less of something

advertising allowances

price reductions given to firms in the channel to encourage them to advertise or otherwise promote the supplier’s products locally

stocking allowances

sometimes called slotting allowances, given to an intermediary to get shelf space for a product

push money (or prize money) allowances

sometimes called PMs or spiffs, given to retailers by manufacturers or wholesalers to pass on to the retailers’ salesclerks for aggressively selling certain items

trade in allowance

price reduction given for used products when similar new products are purchased

sale price

temporary discount from the price list

everyday low pricing

setting a low list price rather than relying on frequent sales, discounts, or allowances

rebates

refunds paid to consumers after a purchase

lease

gives a customer the right to use something for a specified period of time in exchange for regular payments

value pricing

setting a fair price level for a marketing mix that really gives the target market superior value

unfair trade practice acts

put a lower limit on prices, especially at the wholesale and retail levels

dumping

pricing a product sold in a foreign market below the cost of producing it or at a price lower in its domestic market

Wheeler-Lea act

bans unfair or deceptive acts in commerce

price fixing

competitors getting together to raise, lower, or stabalize prices

Price Discrimination

selling the same products to different buyers at different prices, if it injures competition