Pricing Terms and Concepts, Quizzes of Principles of Marketing

Download Pricing Terms and Concepts and more Quizzes Principles of Marketing in PDF only on Docsity! TERM 1 Mark-up Pricing DEFINITION 1 Cost of buying the product from the producer plus amounts for profit and for expenses not otherwise accounted for. TERM 2 Prestige Pricing DEFINITION 2 Charging a high price to help promote a high quality image TERM 3 Price Skimming DEFINITION 3 Policy in which a firm charges a high introductory price, often coupled with heavy promotion. TERM 4 Price Penetration DEFINITION 4 When a firm charges a relatively low price to reach mass markets. TERM 5 Status-Quo DEFINITION 5 charging close to a competitor's price. TERM 6 Yield Management System DEFINITION 6 Technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discounting early purchases, limiting early sales at these discount prices, and over-booking capacity. TERM 7 Profit Maximization Approach DEFINITION 7 Firm tries to chose price so as to maximize profit. TERM 8 Predatory Pricing DEFINITION 8 Charging prices to drive competition out. TERM 9 First Degree Price Discrimination DEFINITION 9 setting a unique price for each customer, ideally equal to each customers willingness-to-pay. (Auctions, internet prices) TERM 10 Second Degree Price Discrimination DEFINITION 10 offering the same menu of prices to all customers, but customers have to do something to get the lower price. The rationale is that high-value customers will self-select the option that generates more revenue for the seller. (Coupons, Rebates, Early Bird Specials)