1. Price
    Exchange value of a good or service
  2. Robinson-Patman Act
    Federal legislation prohibiting price discrimination not based on a cost differantial; also prohibits selling at an unreasonably low price to eliminate competition
  3. Unfair-trade laws
    State laws requiring sellers to maintain minimum price for comparable merchandise
  4. Fair-trade laws
    Statutes enacted in most states that once permitted manufacturers to stipulate a minimum retail price for their product
  5. Marginal analysis
    Method of analyzing the relationship among costs, sales price, and increased sales volume
  6. Profit maximization
    Point at which the additional revenue gained by increasing the price of a product equals the increase in total costs
  7. Target-return objective
    Short-run or long-run pricing objectives of achieving a specified return on either sales or investment
  8. Market-share objective
    Volume-related pricing objective in which the goal is to achieve control of a portion of the market for a firm's good or service
  9. Profit Impact of Market Strategies (PIMS) Project
    Research that discovered a strong positive relationship between a firm's market share and product quality and its return on investment
  10. Value pricing
    Pricing strategy emphasizing benefits derived from a product in comparison to the price and quality levels of competing offerings
  11. Customary Prices
    Traditional prices that customers expect to pay for certain goods and servies
  12. Two ways to determine price:
    • 1. Supply and demand
    • 2. Cost oriented analysis  
  13. Demand
    Schedule of the amounts of a firm's product that consumers will purchase at different prices during a specified time period
  14. Supply
    Schedule of the amounts of a good or service that firms will offer for sale at different prices during a specified time period
  15. Pure competition
    Market structure characterized by homogeneous products in which there are so many buyers and sellers that none has a significant influence on price
  16. Monopolistic competition
    Market structure involving a heterogeneous product and product differentation among competing suppliers, allowing the marketer some degree of control over prices
  17. Oligopoly
    Market structure in which relatively few sellers compete and where high start-up costs form barriers to keep out new competitors
  18. Monopoly
    Market structure in which a single seller dominates trade in a good or service for which buyers can find no close substitutes
  19. Variable costs
    Costs that change with the level of production (such as labor and raw materials costs)
  20. Fixed costs
    Costs that remain stable at any production level within a certain range (such as lease payments or insurence costs)
  21. Average total costs
    Costs calculated by dividing the sum of the variable and fixed costs by the number of units produced
  22. Marginal cost
    Change in total cost that results from producing an additional unit of output
  23. Elasticity
    Measure of responsiveness of purchasers and suppliers to a change in price
  24. Cost-plus pricing
    Practice of adding a percentage of specified dollar amount-or markup- to the base cost of a product to cover unassigned costs and to provide a profit
  25. Full-cost pricing
    Pricing method that uses all relevant variable costs in setting a product's price and allocates those fixed costs not directly attributed to the production of the priced item
  26. Incremental-cost pricing
    Pricing method that attempts to use only cost directly attributable to a specific output in setting prices
  27. Breakeven analysis
    Pricing technique used to determine the number of products that must be sold at a specified price to generate enough revenue to cover total cost
  28. Modified breakeven analysis
    Pricing technique used to evaluate consumer demand by comparing the number of products that must be sold at a variety of prices to cover total cost with estimates of expected sales at the various prices
  29. Yield management
    Pricing strategy that allows marketers to vary prices based on such factors as demand, even though the cost of providing those goods or services remains the same (weekend hotel markup)
Card Set
Pricing Concepts