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marketing_ch9 - Chapter 9 Price the amount of money charged...

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Chapter 9 Price- the amount of money charged for a product or service, or the sum of all the values that customers give up in order to gain the benefits of having or using a product or service Value-based pricing- setting price based on buyers’ perceptions of value rather than on the seller’s cost Good-value pricing- offering just the right combination of quality and good service at a fair price Value-added pricing- attaching value-added features and services to differentiate a marketing offer and support higher prices, rather than cutting prices to match competitors Fixed costs- costs that do not vary with production or sales level Variable costs- costs that vary directly with the level of production Total costs- the sum of the fixed and variable costs for any given level of production Cost-plus pricing- adding a standard markup to the cost of the product Break-even pricing (target profit pricing)- setting price to break even on the costs of making and marketing a product; or setting price to make a target market Target costing- pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met Demand curve- a curve that shows the number of units the market will buy in a given time period, at different prices that might be changed Price elasticity- a measure of the sensitivity of demand to changes in price Market-skimming pricing- setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales Market-penetration pricing- setting a low price for a new product in order to attract a large number of buyers and a large market share Product line pricing- setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors prices Optional-product pricing- the pricing of option or accessory products along with a main product Captive-product pricing- setting a price for products that must be used along with a main product, such as blades for a razor and film for a camera By-product pricing- setting a price for by-products in order to make the main product’s price more competitive Product bundle pricing- combining several products and offering the buddle at a reduced price Discount- a straight reduction in price on purchase during a state period of time
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Allowance- promotional money paid by manufacturers to retailers in return for an agreement to feature
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