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artificial time constraints
pricing strategy that creates a sense of urgency in buyers’ minds
break-even pricing
pricing strategy in which marketers choose a price that will cover all the costs of manufacturing
bundle pricing
pricing strategy that promotes purchasing multiple items at once; used to prod customers to purchase (and spend) more than they may have otherwise
competition-based objective
product pricing based on the prices of a company’s competitors
consumer confidence
an economic indicator that measures the degree of optimism that consumers have regarding the overall state of the country’s economy and their own financial situations
cost-based objective
product pricing based on the costs of doing business
cross-elasticity of demand
the change in price of one good or service as a similar good or service’s price changes
customer value–based objective
product pricing based on a company’s understanding of the value-added benefits of a product
customer-driven objective
product pricing based on what a customer is willing to pay for a product or service
deceptive price advertising
an unethical pricing practice in which the advertised price of a product is misleading to consumers
a buyer’s ability and willingness to purchase a specific product or service
demand curve
a graph that illustrates the relationship between demand and price
demand elasticity
measure of the change in the quantity demanded in relation to the change in its price
discretionary income
a household’s money that is left over after all taxes and necessities are paid
economy pricing
setting a price much lower than competitors to sell high volumes of a product
fixed costs
costs of doing business that do not change based on number of units produced
income effect
the perception buyers have of how price changes will affect their income
an economic measure of the rate of rising prices of goods and services in an economy
market share–oriented objective
setting prices at, below, or above competitors in an effort to increase market share
monopoly gouging
when a seller increases the prices of goods and services that are not considered fair or competitive
odd-even pricing
psychological pricing strategy that uses prices that end with odd or even numbers to attract customers
penetration pricing
new product or service strategy that sets the lowest price possible in order to reach the majority of the market in the introduction stage
predatory pricing
when a company prices goods or services so low that other companies cannot compete
prestige pricing
a strategy marketers use to set high prices knowing that demand will increase with higher prices because the higher price increases the perceived value of the product
the exchange of something of value between a buyer and seller
price anchoring
a frame of reference for a buyer to set an expectation of a price
price appearance
the way in which a customer perceives a price based on how it is visually represented
price discrimination
selling goods and services at different prices to different customers
price fixing
two or more companies agreeing to set certain prices in the market
price gouging
when companies take advantage of a situation, typically an emergency or natural disaster, and charge exceptionally high prices for products or services
price skimming
pricing strategy in which a company initially sets a high price for a product or service and lowers it over time as new segments of the market are reached
product line pricing
setting a higher price for some product lines and lower price points for others in order to capture various target markets
the financial gain of a company
sales-oriented objective
setting prices based on the goal of increasing the volume of sales
products and services that are similar to the one being offered
target return objective
setting prices so they return a specific profit during a given period of time
total costs
total expenses of doing business
total revenue
the money generated from normal business operations
unemployment rate
measure of the number of people not employed in an economy during a given period of time
variable costs
costs that vary based on the number of units produced
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