CH+18+Pricing+Strategies

Dennis Michael Chieng Chanpreet Gill Rachel R

Chp 18 Cash Discounts- Purchasers sometimes receive discounts for quick payment of bills. Trade Discounts- Discount added to the list price to cover expenses. Quantity Discount- Price reduction on large purchases. Trade ins- The seller accepts the item to be traded along with a lower list price. Minimum Advertised Pricing- The manufacture paying the retailer not to sell products under a set price. Rebates- Returning a portion of the purchase price involving a lot of paperwork. Free On Board (FOB) plant/origin- Price does not include shipping charges. Uniform-Delivered Pricing- Price includes shipping charges. Zone Pricing- Like Uniform-Delivered Pricing, the price is includes shipping charges depending on which zone the destination is in. Basing-Point Pricing- To include list price plus shipping charges from the basing-point nearest the buyer. Psychological Pricing- Belief that certain prices make the product more attractive to buyers. Price Flexibility- Decision to set one price for every customer or variable prices to different customers. Product-Line Pricing- A manufacturer sets a limited number of prices for a selection of products. Promotional Pricing- Setting prices lower than normal to draw revenue. Loss Leaders- Setting prices low to attract customers in hopes that they will buy other regularly priced products. Leader Pricing- Setting the item that was part of the loss leaders promotion to regain lost profit. Price-Quality Relationship- Convincing the consumer the quality of the product is offered at a low price. Pricing strategy involving the initial high price relative to competitive offerings. Price is dropped in incremental steps as supplied begins to exceed demand, or when completion catches up. Pricing strategy designed to de-emphasize price as a competitive variable by the pricing a good or service at the general level of comparable offerings. Every day low pricing; related to penetration in pricing devoted to continuous low pricing as opposed to relying on short term, price cutting tactics coupons, rebates. Etc. Loss of sales on an existing product dues to competition from a new product in the same line.
 * Skimming Pricing Strategy**- Setting the initial price high then reducing it as supply exceeds demand or the competition catches up
 * Penetrating Pricing Strateg**y- Setting a low initial price to create recognition, then raising the price to competitors.
 * Competitive pricing strategy**- Setting the price at the competition to focus on the product, distribution and promotional elements.
 * Define Skimming pricing strategy**
 * Define Competitive pricing strategy**
 * What is EDLP?**
 * Define cannibalization**