Marketing Final Study Guide

Product Line Pricing

Pricing products at different levels within the same product line based on cost differences, customer perception, and competitor pricing.

Optional Product Pricing

The practice of pricing a base product separately and offering add-ons for additional charges.

Captive Product Pricing

A pricing strategy where the main product is sold at a low price, while required secondary products are priced high.

Product Bundle Pricing

Combining multiple products into a single package at a reduced price to encourage sales of less popular items.

Value-Based Pricing

Setting prices based on the perceived value to the customer rather than on the cost of the product.

Cost-Based Pricing

A pricing method where price is determined by adding a markup percentage to the cost of the product.

Competition-Based Pricing

Setting prices based on competitors' pricing strategies, particularly in markets with similar and price-sensitive products.

Market Skimming Pricing

Setting a high initial price to maximize profit from early adopters, then lowering the price over time.

Market Penetration Pricing

Setting a low price initially to quickly gain market share, but with risks of low initial profits.

Intensive Distribution

A distribution strategy where products are made available at as many outlets as possible.

Selective Distribution

Limiting product distribution to select outlets to maintain higher levels of control.

Exclusive Distribution

A form of distribution where a product is only available through a limited number of outlets.

Self-Service

A retail format where customers handle their own shopping needs with minimal assistance.

Limited Service

A retail format in which customers receive some assistance during their shopping experience.

Full Service

A retail format that offers personalized shopping assistance for high-end or premium products.

Break-Even Analysis

A calculation to determine the point at which total revenue equals total costs.

Lifetime Value (LTV) of a Customer

The total profit a company expects to earn from a customer over the duration of their relationship.

Improvement Value Method

A value-based pricing method that calculates the perceived value based on product improvements.

Cost of Ownership Method

A method that calculates the final price of a product based on the total cost of ownership over its lifetime.