Pricing Strategies, Accounting Basics, and Stock Market Concepts

These flashcards cover key concepts in pricing strategies, basic accounting, and stock market principles.

Competition-based pricing

Pricing set based on the prices of competitors.

Skimming pricing

Setting a high initial price to maximize revenue from early adopters, lowering it over time.

Penetration pricing

Setting a low initial price to attract customers quickly, increasing prices later.

Everyday Low Pricing (EDLP)

Offering products at consistently low prices without relying on sales.

High-low pricing

Starting with a high price and lowering it through promotions.

Psychological pricing

Setting prices in a way that appears more attractive to consumers, e.g., $9.99.

Total product offer

Everything that consumers evaluate when deciding whether to buy something.

Product line

A group of products that are similar or intended for a similar market.

Product mix

The combination of different product lines offered by a manufacturer.

Brand

A name, symbol, or design identifying the goods or services of one seller.

Trademark

A brand with exclusive legal protection for its name and design.

Brand loyalty

The degree to which customers are satisfied and committed to repurchasing a brand.

Brand equity

The value of a brand name and its associated symbols.

Generic products

Nonbranded products that sell at a discount compared to national brands.

Knockoff brands

Illegal copies of national brand-name goods.

Shopping goods

Products compared by cost, quality, and value.

Convenience goods

Products bought with minimal effort.

Specialty goods

Goods with unique characteristics, e.g., designer clothes.

Accounting

Business function providing insight into a business's financial soundness.

Tax accounting

Focuses on compliance with tax laws.

Managerial accounting

Focuses on financial analysis within an organization.

Financial accounting

Focuses on financial reporting to external parties.

Public accountants

Examine finances for multiple companies.

Private accountants

Examine finances for one single company.

Auditing

The review and evaluation of financial information.

Independent auditing

An unbiased evaluation of a company's financial statements.

Leverage ratios

Measure the degree to which a firm relies on borrowed funds.

Activity ratios

Measure how effectively management turns over inventory.

Balance sheet

A financial statement reporting a firm's financial condition at a specific time.

Cost of Goods Sold

The measure of cost of merchandise sold or raw materials in production.

Intangible asset

Long-term assets without physical form but hold value, like patents.

Depreciation

The systematic write-off of an asset's cost over its useful life.

Initial public offering (IPO)

The first time a private company offers shares for sale to the public.

Primary market

Where new securities are created and sold to investors for the first time.

Secondary market

Where investors buy and sell previously created securities.

Investment banker

Advises on and facilitates large financial transactions.

Institutional investor

An entity that invests large pools of money for clients.

Dividend

Part of a firm’s profit distributed to stockholders.

Stock exchange

A marketplace for buying and selling securities.

NASDAQ

An electronic system for communicating stock trades.

Securities and Exchange Commission (SEC)

Federal agency regulating the stock exchange.

Stockbroker

A person who buys and sells securities for clients.

Diversification

Buying various types of investments to reduce risk.

Capital gain

The profit from selling a stock at a higher price than it was bought.

Stock splits

Divides a company's existing shares into multiple shares.

Bull market

A market condition where prices are rising.

Bear market

A market condition where prices are falling.