LO 11-1 and 11-2 Pricing Strategy
The amount of something that is exchanged with a seller to obtain a product or service
Price
Pricing Method in which a certain amount is added to the cost of the product to set the final price; also called cost-plus pricing
Markup Pricing
What has helped shift the balance of power from companies to customers
Taxes on imports and exports between countries
Tariffs
Price Discrimination
What is the objective of the pricing strategy?
Profitability
The amount a product sells for above the total cost of the product itself
Profit Margin
A pricing tactic that involves constantly updating prices to reflect changes in supply, demand, or market conditions
Dynamic Pricing
The sale of branded products through legal but unauthorized distribution channels
Gray Market
Companies collude to set a product's price
Price Fixing
How many steps are in the Price-Setting Process
6
Sets prices at even dollar amounts
Even Pricing
Pricing tactic in which the consumer submits a bid at the price he or she is willing to pay for a product or service
Name-your-own-price
Occurs when a company sells its exports to another country at a lower price than it sells the same product in its domestic market
Dumping
Setting initial prices low to drive out competition, then raising prices back to normal levels
Predatory Pricing
Break-even point
Price reductions given to customers purchasing goods or services out of season
Seasonal Discount
What contributes to the new era of pricing transparency?
Mobile Applications
Name the three major challenges of global pricing
Gray Market, Tariffs, Dumping
Intentionally misleading customers with price promotions
Deceptive Pricing
The third step in the Price-Setting Process
determine the costs
Involves selling a product at a price that causes the firm a financial loss
Loss-leader pricing
What was the price comparison app example?
ShopSavvy
Which out of three challenges is difficult to track?
Gray Market
Name the U.S. law that eliminates monopolies and guarantees competition
Sherman Antitrust Act