Marketing Chapter 10 (Pricing and Value)

Value-Based Pricing
Uses buyers perceptions of value, not seller’s cost, as the key to pricing
Value Added
The enhancement a company gives its product or service before offering the product to customers so as to distinguish the product from its homogeneous competitors
Good value pricing
Any pricing strategy that tries to split value creation somewhat evenly between a firm and its customers. This is in contrast to raising prices as high as consumers will pay or pushing them as low as the company can afford
Every Day Low Price (EDLP)
A pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shopping
Hi-Low Pricing
A pricing strategy where a firm charges a high price for an item and later when the item’s popularity has passed, sell it to customers by giving discounts or through clearance sales
Cost-based pricing
Setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk.
Cost + pricing
Pricing by adding a standard markup to the cost of the product
Break-even pricing
Pricing based on fixed costs, variable costs, and total revenues, and there is no profit or a target profit
Competition based pricing
Setting prices based on competitors strategies, prices, costs, and market offerings
Elastic demand
A situation in which consumer demand is sensitive to changes in price

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