Pricing Strategies
Determining how much something costs based on how long it takes to do it
Time-based pricing
Things like rent, salaries, and insurance are examples of this
Charging more in times of emergency
Price Gouging
Mr. McClain runs a business. Unfortunately, he never sold a thing! Which costs does he have to pay despite never selling a single item?!?!?!??!?!?`
FIXED COSTS
Mr. McClain is feeling quite devious today. He is going to start selling snacks in his classroom at a sale price of $3 a pop. Little do the students know, that this is always the price.... Mwahahahahahhaha! What is this called?
Deceptive "Sale" Pricing
Competitive Pricing
Things like utilities and production costs are known as this:
Variable costs
When I advertise something as 24.99 but during the checkout process, you find out that it is much more after the add-ons
Hidden fees
Mr. McClain is shopping at costco. He loves costco. He does not have a membership he snuck in. He loves costco because they use pricing strategy by selling items in bulk.
Wholesale cost
Mr. McClain is having trouble keeping his business profitable. He has lost money in his first few months. The dollar ammount he is trying to reach in order to not be negative is his _________
Breakeven point
Popular brands like Jordan, Apple, and Gucci use this strategy to price their products because they know they will pay it
Demand Pricing
The most a customer is willing to pay
Maximum price
When I advertise something as a one time only offer for $5, but in reality, it is always $5
Deceptive "sale" Pricing
Mr. McClain's Timbers are shivered! (He is scared) He is worried about companies using illegal marketing tactics to exploit the public. Which government program helps protect the public?
Federal Trade Commission (FTC)
Price Gouging
Sometimes we offer to pair products together at a lower rate to increase sales and offload extra inventory
Bundling
Wholesale cost
A company offering you something they never intended to sell in order to lure you in, then trying to persuade them to buy something more expensive or something inferior
Bait and Switch
Uber has surge hours. When there is less demand, the prices are lower. When there is high demand, the prices are higher. This is done by an AI or set algorithm
Dynamic Pricing
Mr. McClain has no idea the demand for a new product he is making, and there are no real competitors. What pricing strategy should he use?
Cost-Based Pricing
This price is determined by how much someone values their intellectual property
Pricing an Idea
When the Total revenue meets the total costs
Breakeven point
When a company tanks their prices in order to drive out competition, then raises them when they can monopolize
Predatory Pricing
Mr. McClain opens a big bag of chips. He is happy.
After opening the bag, he realizes it is 1/3 full. He is sad.
What is this term called?
Shrinkflation
Demand pricing