Download Pricing Terms and Concepts and more Quizzes Introduction to Business Management in PDF only on Docsity! TERM 1 Price DEFINITION 1 the amount of money charged for a product or service; the sum of the values that customers exchange for the benefits of having or using the product or service TERM 2 Customer Value-Based Pricing DEFINITION 2 setting price based on buyers' perceptions of value rather than on the seller's cost TERM 3 Good-Value Pricing DEFINITION 3 offering the right combination of quality and good service at a fair price TERM 4 Value-Added Pricing DEFINITION 4 attaching value-added features and services to differentiate a company's offers while charging higher pricesadding services to a current g/s for a little higher price TERM 5 Cost-Based Pricing DEFINITION 5 setting prices baded on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk TERM 6 Fixed Costs (aka Overhead) DEFINITION 6 costs that do not vary with production or sales level TERM 7 Variable Costs DEFINITION 7 costs that vary directly with the level of production TERM 8 Total costs DEFINITION 8 the sum of the fixed and variable costs for any given level of productionTC=FC + VC TERM 9 Cost-Plus Pricing (Markup Pricing) DEFINITION 9 adding a standard markup to the cost of the product TERM 10 Break-even Pricing (target return pricing) DEFINITION 10 setting price to break even on the costs of making and marketing a product, or setting price to make a target return TERM 21 Allowance DEFINITION 21 a reduction from the list price for buyer actions such as trade-ins or promotional and sales supportPA: payments or price reductions that reward dealers for participating in advertising and sales support programs TERM 22 Segmented Pricing DEFINITION 22 selling a product or service at two or more prices, where the difference in prices isn't based on differences in costsCustomer-Segment: Senior Citizen PricingProduct-Form: different versions of the productLocation-Based: seating at eventsTime Based: varies by the season, month, day, or hour TERM 23 Psychological Pricing DEFINITION 23 pricing that considers the psychology of prices, not simply the economics; the price says something about the prdocut TERM 24 Reference Prices DEFINITION 24 prices that buyers carry in their minds and refer to when they look at a given productUse these prices to compare TERM 25 Promotional Pricing DEFINITION 25 temporarily pricing product below the list price, and sometimes even below cost, to increase short-run sales TERM 26 Dynamic Pricing DEFINITION 26 adjusting prices continually to meet the characteristics and needs of individual customers and situationsPrevalent online
