MKT: Chapter-11. Marketing key terms

 Chapter-11

Pricing Strategies

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• 1. Market skimming pricing: It means 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.
• 2. Market-penetration pricing: It states that setting a low price for a new product in order to attract a large number of buyers and a large market share.
• 3.     Optional-product pricing: It means the pricing of optional or accessory products along with a main product.
• 4.     Captive-product pricing: It states that 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.
• 5.     By-product pricing: It states that setting a price for by-products in order to make the main product’s price more competitive.
• 6.     Discount: It means a straight reduction in price on purchases during a stated period of time.
• 7.     Segmented pricing: Setting a product orr service at two or more prices, where the difference in prices is not based on differences in costs.
• 8.     Psychological pricing: A pricing approach that considers the psychology of prices and not simply the economics: the price is used to say something about the product.
• 9.     Reference prices: Prices that buyers carry in their minds and refer to when they look at a give product.
• 10. Promotional pricing: Temporarily pricing products below the list price and sometimes even below cost to increase short-run sales.
• 11. FOB-origin pricing: A geographical pricing strategy in which goods are placed free on board a carrier, the customer pays the freight from the factory to the destination.
• 12. Uniform-delivered pricing: A geographical pricing strategy in which the company charges the same price plus freight to all customers, regardless of their location.
• 13. Zone pricing: A geographical pricing strategy in which the company sets up two or more zones. All customers within a zone pay the same total price, the more distant the zone, the higher the price.
• 14. Basing-point pricing: A geographical strategy in which the seller designates some city as a basing point and charges all customers the freight cost from that city to the customer.
• 15. Freight-absorption pricing: A geographical pricing strategy in which the seller absorbs all or part of the freight charges in order to get the desired business.
• 16. Dynamic pricing: Adjusting prices continually to meet the characteristics and needs of individual customers and situations.

   Note: © all information has collected from Principles of Marketing book (Asian perspective)