Principles of Marketing: Pricing Decisions

Flashcards on Pricing Decisions to help students review lecture notes and prepare for exams.

Price

The amount of money paid or payable to acquire a product and its accompanying services.

Cost of Production

The expenses incurred in manufacturing a product, including raw materials, labor, and overheads.

Market Demand

The level of desire and willingness of consumers to purchase a product.

Competition

The presence of rival companies offering similar products.

Target Audience

The specific group of consumers a company aims to attract.

Government Policies

Regulations and taxes that impact pricing by adding additional costs to products or services.

Economic Conditions

External economic elements that affect both the cost of production and consumer spending power.

Brand Positioning

The image and perception of a brand in the market.

Pricing for Target Return (ROI)

A pricing objective that aims to achieve a specific rate of return on investment.

Market Share

A company’s percentage of total sales in a specific market.

Profit Maximization

A strategy that aims to maximize profits on total sales, typically in monopolistic markets.

Stabilize Price

A strategy that aims to maintain stable prices over time to avoid sharp fluctuations.

Discount and Allowance Pricing

Reducing prices to reward customer behaviors such as bulk purchases or early payments.

Segmented Pricing

Adjusting prices to reflect differences in customer segments or geographic locations.

Psychological Pricing

Setting prices just below whole numbers to make a product seem more affordable.

Promotional Pricing

Temporarily reducing prices to boost short-term sales or clear inventory.

Geographical Pricing

Adjusting prices based on a customer’s location to account for differences in costs and demand.

Dynamic Pricing

Real-time price adjustments based on market conditions or customer profiles.

International Pricing

Adjusting prices across different countries based on local market conditions and regulations.

Product Line Pricing

Setting different price points for various products in a single product line.

Optional-Product Pricing

Pricing optional accessories or features separately from the main product.

Captive-Product Pricing

Offering a main product at a lower price while setting higher prices for necessary additional products.

By-Product Pricing

Selling by-products to offset the costs of the main product.

Product Bundle Pricing

Offering multiple products together at a discounted price.

Market-Skimming Pricing

Setting high prices initially to target consumers willing to pay a premium, then reducing prices.

Market-Penetration Pricing

Setting low prices initially to attract a large customer base.

Sound Price Policy

A pricing strategy designed to maximize profits while ensuring customer satisfaction and fair pricing.

Resource Mobilization

A pricing objective that ensures sufficient funds are generated to support a firm’s expansion.