Pricing Strategies and Policies Review

These flashcards cover essential vocabulary related to pricing strategies and regulations discussed in the lecture, aiding in understanding key concepts.

Market-Skimming Pricing

Setting a high initial price to skim revenues layer by layer from the market.

Market-Penetration Pricing

Setting a low initial price to attract a large number of buyers quickly and gain market share.

Product Line Pricing

Setting price steps between products in a line based on cost differences and customer value perceptions.

Optional-Product Pricing

Pricing optional or accessory products sold with the main product.

Captive-Product Pricing

Pricing products that must be used with the main product (e.g., razor blades).

By-Product Pricing

Pricing low-value by-products to make the main product’s price more competitive.

Product Bundle Pricing

Combining several products at a reduced price.

Discount and Allowance Pricing

Discounts for early payment, buying in volume, off-season, or promotional allowances.

Segmented Pricing

Selling the same product at different prices based on various factors.

Psychological Pricing

Pricing that considers the psychological impact on consumers.”},{

Promotional Pricing

involves temporarily pricing products below list price to increase short-term sales.

Geographical Pricing

adjusting prices for customers in different locations, which includes approaches like FOB, zone, and uniform pricing.

Dynamic and Personalized Pricing

refers to adjusting prices in real time based on customer behavior and demand.

International Pricing

adjusting prices to match different country conditions, regulations, and cost structures.

Price Fixing

refers to the illegal agreement among competitors to set prices.

Predatory Pricing

is the illegal practice of pricing below cost to drive out competitors.

Price Discrimination

is legal if cost differences exist and is regulated by the Robinson-Patman Act.

Retail Price Maintenance

prohibits manufacturers from forcing retailers to sell at specific prices.

Deceptive Pricing

includes misleading pricing practices that are prohibited, such as bogus reference prices and scanner fraud.