Price - Vocabulary Flashcards

Flashcards to help learn key vocabulary terms related to price.

Price

The amount of money requested or exchanged for a product.

List price

The established price of a product, as published in a catalogue, on a price tag, or in a price list. It doesn’t include any discounts.

Market price

The actual price you pay for a product, after any discounts or coupons are deducted.

MSRP

Manufacturer’s suggested retail price. This is the price that the manufacturer recommends.

Price competition

Occurs when a marketer emphasizes low price in order to attract customers.

Non-price competition

Emphasizes marketing factors other than price to distinguish products. Examples include quality, brand name, customer service, uniqueness, and reputation.

Business cycle

Alternating periods during which the economy contracts (shrinks) and expands.

Price fixing

A situation in which a group of competitors gets together and sets (fixes) the price for a specific product; then they all agree to sell that product for the same price.

Price discrimination

A situation in which a company plays favorites by charging lower prices to some companies for the same products.

Demand elasticity

The degree to which demand changes based on price.

Elastic demand

Demand that changes with price. (E.g. Wants/Luxuries, Products with substitutes.)

Inelastic demand

Demand that is not affected by price. (E.g. Medicines, Needs, No substitutes, Brand loyalty.)

Pricing objectives

The goals that tell what a marketer wants to achieve through pricing.

Maximize Profit

Charging the highest price that customers will pay before they decide that the price far exceeds value.

Maximize Sales

Offering the lowest price possible to get the largest number of customers to buy the product.

Market share

One competitor’s percentage of the total sales of a specific product.

Meet Competition

A company setting its prices relative to the prices charged by the competition.

Return on Investment (ROI)

A ratio (a metric or measurement) that tells you how much you earned as a percentage of the investment you made to earn the money.

Return on Marketing Investment (ROMI)

Measures the overall effectiveness and impact of a marketing campaign. It’s a subcategory of ROI.

Break-even point

The point at which revenue from sales equals costs.

Price Lining

This puts all the products that are one price in one place.

Everyday Low Prices

Sales on every item; rarely a regular price

Purchase Discounts

A reduction from the regular or list price of the product.

Super Sizing

The opportunity for a consumer to receive a larger portion of a product by paying a slightly higher price.

Interest Free Pricing

Refers to purchases with low or no interest charges for the extent of the contract.

Combo Pricing

Offers the consumer a deal on one part of the sale, but the business makes a large profit on the other parts it requires the consumer to buy.

Psychological Pricing

A set of pricing techniques used to create an image of a product and to entice customers to buy.