marketing Chapter F: unit strategies

market share

percentage of a market accounted for by a specific entity

market position

The relative standing a competitor has in a given market in comparison to its other competitors.

penetration pricing

setting the price for a new product very low to encourage as many as possible to buy the product

segmented pricing strategy

A strategy that uses two or more different prices for a product, though there is no difference in the item's cost.

Elastic Pricing

price change has a big effect on supply or demand

inelastic pricing

market is not price sensitive; price changes do not change quantity demanded

multiple unit pricing

Packaging together two or more identical products and selling them at a single price

Law of diminshing marginal utility

The more of something we consume the less extra satisfaction we get from each additional unit consumed.
This will mean we are prepared to pay less for each additional unit

pricing function

Places a value on a good or service to produce a profit. Looks at costs, competition and how much customers are willing to pay for a product or service.

markup pricing

Used primarily by wholesalers and retailers who are involved in acquiring goods for resale

commission

An amount paid to an employee based on a percentage of the employee's sales

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Price

The amount of money exchanged for a good or service and describes the value placed on a good or service

cost

the money expended to produce and market a product or service

markup

the difference between an item's cost and sales price

markdown

The amount of a reduction from the selling price.

break-even point

the sales volume at which total revenues are equal to total costs

one-price policy

all customers are charged the same price for the goods and services offered for sale

flexible-price policy

customers pay different prices for the same type or amount of merchandise

skimming pricing (price skimming)

Product starts at the highest possible price in the introduction stage of a (new/innovative) product, and price is lowered later; This is Apple's pricing strategy because their products are priced higher than other competitors when introduced to the market.

product mix pricing strategies

Adjusting the price to maximize profitability for a group of products not just one product

bundle pricing

Pricing method in which a company offers several complementary, or corresponding, products in a package that is sold at a single price.

psychological pricing

Pricing techniques that create an illusion for customers

prestigious pricing

sets higher-than-average prices to suggest status and high quality to the customer. Usually ends in an even number to suggest higher quality.

everyday low pricing (EDLP)

a psychological pricing strategy that sets low prices set on a consistent basis with no intention of raising them or offering discounts in the future

promotional pricing

Used in conjunction with sales promotions when prices are reduced for a short period of time.

odd-even pricing (psychological pricing)

Odd-numbered prices imply bargains, and even-numbered prices imply quality/prestige

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