Marketing Ch. 14

Setting the highest initial price that customers really desiring the product are willing to pay

Setting a low initial price on a new product to appeal immediately to the mass market

Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it

A firm that is selling not just a single product but a line of products that prices them at a number of different specific pricing points

Involves setting prices a few dollars or cents under an even number

Estimate the price that the ultimate consumer would be willing to pay for a product

Demand-oriented pricing practice, the marketing of two or more products in a single package price

Charging of different prices to maximize revenue for a set amount of capacity at any given time

Adding a fixed percentage to the cost of all items in a specific product class

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price

A fixed percentage is added to the total unit cost

A supplier is reimbursed for all costs, regardless of what they turn out to be, but is allowed only a fixed fee as profit that is independent of the final cost of the project.

Based on the larning effect, which holds that the unit cost of many products and services declines by 10 percent to 30 percent each time a firm's experience at producing and selling them doubles

A firm may set an annual target of a specific dollar volume of profit

Set typical prices that will give them a profit that is a specified percentage, say, 1 percent, of the sales volume