Gray Market Employs irregular but not necessarily illegal methods generally it

Gray market employs irregular but not necessarily

This preview shows page 1 - 2 out of 5 pages.

price usually is set according to the laws of supply and demand. Gray Market : Employs irregular but not necessarily illegal methods; generally, it legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer. Everyday Low Pricing (EDLP) : A strategy companies use to emphasize the continuity of their retail prices at a level somewhere between the regular, nonsale price and the deep-discount sale prices their competitors may offer. High/Low Pricing : A pricing strategy that relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases. Reference Price : The price against which buyers compare the actual selling price of the product and that facilitates their evaluation process. Market Penetration Strategy : A growth strategy that employs the existing marketing mix and focuses the firm's efforts on existing customers. Experience Curve Effect : Refers to the drop in unit cost as the accumulated volume sold increases; as sales continue to grow, the costs continue to drop, allowing even further reductions in the price. Price Skimming : A strategy of selling a new product or service at a high price that innovators and early adopters are willing to pay in order to obtain it; after the high-price market segment becomes saturated and sales begin to slow down, the firm generally lowers the price to capture (or skim) the next most price sensitive segment. Leader pricing is a legitimate attempt to build store  traffic by pricing a regularly purchased item aggressively, but still above the store's cost.  Loss Leader Pricing : Loss leader pricing takes the tactic of leader pricing one step further by lowering the price below the store's cost. Bait-and-Switch : A deceptive practice of luring customers into the store with a very low advertised price on an item (the bait), only to aggressively pressure them into purchasing a higher-priced model (the switch) by disparaging the low-priced item, comparing it unfavorably with the higher-priced model, or professing an inadequate supply of the lower-priced item. Price Discrimination : The practice of selling the same product to different resellers (wholesalers, distributors, or retailers) or to the ultimate consumer at different prices; some, but not all, forms of price discrimination are illegal. Price Fixing : The practice of colluding with other firms to control prices. Horizontal Price Fixing : Occurs when competitors that produce and sell competing products collude, or work together, to control prices, effectively taking price out of the decision process for consumers. Vertical Price Fixing : Occurs when parties at different levels of the same marketing channel (e.g., manufacturers and retailers) collude to control the prices passed on to consumers. Manufacturer’s Suggested Retail Price (MSRP) : The price that manufacturers suggest retailers use to sell their merchandise. Marketing Channel Management : Also called supply chain management, refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers.
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read all 5 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture