Pricing Objectives
Goals that describe what a firm wants to achieve through pricing
Cost-Based Pricing
Adding a dollar amount or percentage to the cost of the product
Cost-Plus Pricing
Adding a specified dollar amount or percentage to the seller's cost
Markup Pricing
Adding to the cost of the product a predetermined percentage of that cost
Demand-Based Pricing
Pricing based on the level of demand for the product
Competiton-Based Pricing
Pricing influenced primarily by competitors' prices
Differential Pricing
Charging different prices to different buyers for the same quality and quantity of product
Negotiated Pricing
Establishing a final price through bargaining between seller and customer
Secondary-Market Pricing
Setting one price for the primary target market and a different price for another market
Periodic Discounting
Temporary reduction of prices on a patterned or systematic basis
Random Discounting
Temporary reduction of prices on an unsystematic basis
Price Skimming
Charging the highest possible price that buyers who most desire the product will pay
Penetration Pricing
Setting prices below those of competing brands to penetrate a market and gain a significant market share quickly
Captive Pricing
Pricing the basic product in a product line low, while pricing related items higher
Premium Pricing
Pricing the highest-quality of most versatile products higher that other models in the product line
Bait Pricing
Pricing an item in a product line low with the intention of selling a higher-priced item in the line
Price Lining
Setting a limited number of prices for selected groups or lines of merchandise
Psychological Pricing
Pricing that attempts to influence a customer's perception of price to make a product's price more attractive
Reference Pricing
Pricing a product at a moderate level and displaying it next to a more expensive model or brand
Bundle Pricing
Packaging together two or more complementary products and selling them at a single price
Multiple-Unit Pricing
Packaging together two or more identical products and selling them at a single price
Everyday Low Prices (EDLP)
Pricing products low on a consistent basis
Odd-Even Pricing
Ending the price with certain numbers to influence buyers' perceptions of the price or product
Customary Pricing
Pricing on the basis or tradition
Prestige Pricing
Setting prices at an artificially high level to convey prestige or a quality image
Professional Pricing
Fees se by people with great skill or experience in a particular field
Price Leaders
A product priced below the usual markup, near cost, or below cost
Special-Event Pricing
Advertised sales or price cutting linked to a holiday, a season or an event
Comparison Discounting
Setting a price at a specific level and comparing it with a higher price