firms set a very low price for one or more of its products with the intent to drive its
competition out of business
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predatory pricing
developing prices for new products is challenging, when similar to a product on the
market the value has already been established and the value based methods
described earlier can be employed but when a product is new to the world two
distinct strategies are used: market penetration pricing and price skimming
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new product pricing strategies
,illegal, competitors that produce and sell competing products collude to control
prices, effectively taking price out of the decision process for consumers
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horizontal price fixing
=fixed costs(+target profit)/contribution per unit
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break even point (in units)
demand curves can be downward sloping when plotted against price level, as price
increases->demand decreases for said product, but sometimes they are upward
sloping only to a certain point then downward sloping (prestigious products)
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demand curves and pricing
consumers purchase these for their status rather than their functionality, higher the
price->the greater the status associated with it and the greater the exclusivity because
fewer people can afford to purchase it (customers value the increase in prestige more
than the price differential between this and other normal products)
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, prestigious products/services
firm deliberately prices a product above the prices set for competing products to
capture those customers who always shop for the best or for whom price doesn't
matter, thus companies gain market share by offering a high-quality product at a price
that is perceived to be fair by its target market as long as they use effective
communication and distribution methods to generate high value perceptions among
consumers
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premium pricing
occurs when two or more firms compete primarily by lowering their prices
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price war
traditionally all company objectives are aimed at making a profit however firms
implement this by focusing on target profit pricing, maximizing profits, or target return
pricing
Give this one a try later!
profit orientation of company objectives
competition out of business
Give this one a try later!
predatory pricing
developing prices for new products is challenging, when similar to a product on the
market the value has already been established and the value based methods
described earlier can be employed but when a product is new to the world two
distinct strategies are used: market penetration pricing and price skimming
Give this one a try later!
new product pricing strategies
,illegal, competitors that produce and sell competing products collude to control
prices, effectively taking price out of the decision process for consumers
Give this one a try later!
horizontal price fixing
=fixed costs(+target profit)/contribution per unit
Give this one a try later!
break even point (in units)
demand curves can be downward sloping when plotted against price level, as price
increases->demand decreases for said product, but sometimes they are upward
sloping only to a certain point then downward sloping (prestigious products)
Give this one a try later!
demand curves and pricing
consumers purchase these for their status rather than their functionality, higher the
price->the greater the status associated with it and the greater the exclusivity because
fewer people can afford to purchase it (customers value the increase in prestige more
than the price differential between this and other normal products)
Give this one a try later!
, prestigious products/services
firm deliberately prices a product above the prices set for competing products to
capture those customers who always shop for the best or for whom price doesn't
matter, thus companies gain market share by offering a high-quality product at a price
that is perceived to be fair by its target market as long as they use effective
communication and distribution methods to generate high value perceptions among
consumers
Give this one a try later!
premium pricing
occurs when two or more firms compete primarily by lowering their prices
Give this one a try later!
price war
traditionally all company objectives are aimed at making a profit however firms
implement this by focusing on target profit pricing, maximizing profits, or target return
pricing
Give this one a try later!
profit orientation of company objectives
