What are objectives of pricing?
Earning a target return on investment (ROI)
Maximizing Profit, Sales, Market Share
Maintaining Status Quo
What is the break even point?
When sales have paid for all the fixed costs
What is the formula for break even in units?
Total FC/(Price-VC)
Explain Quantity Discounts, Cash discounts, and Seasonal Discounts.
Quantity Discounts - lower prices when customers buy larger quantities
Cash Discounts - buyers get discount for paying cash
Seasonal Discounts - prices reducing to clear seasonal inventory
List and explai beach shipping adjustment pricing strategy.
FOB Origin - buyer pays for shipping & takes ownership at origin
FOB Destination - seller pays shipping & ownership transfer upon delivery
Uniform-Delivered Pricing - all buyers pay same shipping fees (regardless of location)
Explain Trade Allowances, Reciprocal Agreements, and Bounce Back Promotions
Trade Allowances - manufacturers offer retailers discount to promote/restock their product
Reciprocal Agreements - Businesses partner up to offer cross-promotional discounts. Ex. Store offering coupons for a restaurant close by.
Bounce Back Promotions - customers receive discount cards or coupons after a purchase to encourage future visits and repeat buying.
What is markup pricing? What is the formula for selling price?
Adds a percentage to the cost of the product to determine the selling price.
Selling $ = Cost + (Cost*Markup %)
What is margin pricing? What is the selling price formula?
Ensures the final price reflects the desired profit margin (as a percentage of the selling price).
Selling $ = Cost/1-Margin %
What is price fixing?
When firms get together and agree to charge the same prices. This is illegal.
What is price skimming?
Setting a high price at launch
What is penetration pricing strategy?
Low price at launch
What is cost-plus pricing?
Taking the cost and adding a profit to determine a price
What is odd-even pricing?
Pricing a product a few cents or dollars below the next dollar amount (ex $4.99 instead of $5)
What is loss leader?
Pricing one or more items low to get people into a store
Explain price lining and demand backward pricing
Price lining - offers products at distinct price points to simplify choices
Demand Backward Pricing - sells items below cost to attract customers into the store
What is Sealed Bid Pricing, Auction Pricing, and Reverse Auction?
Sealed Bid - confidential bids where lowest offer wins (real estate)
Auction Pricing - buyers bid again each other to purchase a product like EBay
Reverse Action - sellers compete to offer the lowest price to a buyer
What is Going Rate Pricing, Price Bundling and Captive Pricing?
Going Rate - sets prices based on market average (gas)
Price Bundling - combines multiple products into one package at a lower price
Captive Pricing - sets low price for a main product but high prices for necessary accessories
What is product mix pricing, two-part pricing, and payment pricing?
Product mix - pricing related products differently to maximize profit (selling car at base price but charging extra for floor mats)
Two-Part Pricing - fixed fee plus a variable usage fee
Payment pricing - allows customers to pay in instalments
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Chapter 1 - What Is Marketing12
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Chapter 2 - Strategic Planning6
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Chapter 3 And 4 - Consumer Behaviour & Business Buying Behaviour13
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Chapter 5 - Targeted Vs Mass Marketing11
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Chapter 6 - Offerings10
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Chapter 7 - Managing Offerings15
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Chapter 8 - Marketing Channels22
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Chapter 9 - Supply Chains17
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Chapter 10 - Gathering Information20
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Chapter 11 - IMC17
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Chapter 12 - PR, SM, & Sponsorship3
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Chapter 15 - Pricing18
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Chapter 16 - Marketing Plan10
