Pricing Strategies (basic)
The cost of making or buying a product plus a markup
What is Cost-Plus Pricing?
Setting a price based on what competitors are charging
What is Competitive Pricing?
A rival store sells a similar laptop for $800, you price yours at $795 to attract customers
What is Competitive Pricing?
The point where a business makes exactly enough money to cover all of its costs
What is Break-Even Point?
The amount of money ($) left after a business pays all of its expenses
What is Profit?
Setting prices that have a psychological impact, such as $9.99 instead of $10.00; sometimes called odd/even pricing
What is Psychological Pricing?
Adjusting prices based on the location where the product or service is sold
What is Geographical Pricing?
A software company charges a high price for a new app that saves businesses a lot of time and money, because the perceived value is high
What is Value-Based Pricing?
The percentage (%) of total sales in the market that belongs to a particular company/brand
What is Market Share?
The percentage (%) of sales that a business keeps as a profit
What is Profit Margin?
Offering several products or services together at a lower price than if bought separately
What is Bundle Pricing?
Setting a price based on how much value the product or service provides to the customer; includes "prestige pricing"
What is Value-Based Pricing?
An airline's ticket prices vary depending on how many seats are left and how close the flight date is
What is Dynamic Pricing?
The rivalry between businesses that sell similar products, trying to attract the same customers
What is Market Competition?
If a company makes 30% of all the sales in its industry, this represents it's ______ _____
What is Market Share?
Offering a basic product or service for free while charging for premium features
What is Freemium Pricing?
Changing prices based on demand, competition, or other factors
What is Dynamic Pricing?
An app offers basic functionality for free but charge for more advanced features or an ad-free experience
What is Freemium Pricing?
This phrase refers to how much of a product is available and how much customers are willing to buy
What is Supply and Demand?
The amount of money a business earns before subtracting any expenses
What is Revenue?
Setting a high price initially and then gradually lowering it over time
What is Skimming Pricing?
Setting a low price to enter a competitive market and attract customers quickly, then raising the price later; sometimes called a "loss leader"
What is Penetration Pricing?
A new streaming services offers a low subscription fee for the first few months to build a user base before increasing the price
What is Penetration Pricing (loss leader)?
This percentage (%) shows how much of each sales dollar become profit
What is Profit Margin?
Revenue minus Expenses equals ___ ______
Net Profit or Net Income