Number of flashcards in this category: 22.
1.	reference prices		- Consumers have ideal base price they are willing to pay. ex: Taco Bell too expensive, re-priced based on reference prices.
2.	elasticity		- elastic products are those in which a change in price causes change in qty. demanded (luxury goods, flexible, substitutes available) - inelastic goods are often staples or necessities: a drastic change in price does not change demand (gas, medications) E = %change in demand/% change in price
3.	price-quality inferences		higher price = higher quality
4.	two part pricing		set-up fee, and then monthly fee
5.	promotional cues		stores put extreme discount on items, but expecting to make sales because you buy other stuff as well ex: grocery (limit 1 on good deals), you buy other stuff too
6.	AirMount		Tried to skim it to offices. - Should have penetrated at low price. - Easy to understand/use. - Captive pricing with the tool + sheets.
7.	steps to pricing (6)		1. develop pricing objectives 2. estimate demand 3. determine costs 4. evaluate the pricing environment 5. choose a pricing strategy 6. choose pricing tactics
8.	2. estimating demand		- see demand curve: find the right price point at which people buy in enough amount @ certain price (maximize revenues) - inverse luxury goods curve: too low, or too high, sales drop - "sweet spot" - see elasticity
9.	captive pricing		camera and film, razors and blade
10.	6. pricing tactics		(see various tactics) -
11.	1. pricing objectives		- gain sales/market share (not necessarily profit) - profit (ex. Steinway's priced for profit, not mkt share) - competitive effect (disrupt competition by price slashing) - gain customer satisfaction - enhance image (high price = high quality)
12.	bundling		Putting together related products: - introduce to new products - charge more - perceived "more value"
13.	channel based		often for raw materials, base price on where distributed and how far to reach desired channels
14.	4. pricing environment		Look at context: - inflation/recession - competition: monopoly? many other companies? - channel concerns (collaborators, shipping costs) - consumer trends - gov't concerns (laws)
15.	Hybrid Cars		Aren't chosen for their price, rather people buy for psychological and emotional reasons (status symbol)
16.	3. determining costs		(see mktg math)
17.	odd-even pricing		odd: ends in cents (infers that its cheaper) even: ends in whole dollars (infer that it's higher quality, more expensive)
18.	price-lining		Having similar products at various price points. (With small variation in design) ex: Cuisinart, Whirlpool, KitchenAid
19.	dynamic pricing		e.g. Google Adwords How much are YOU willing to pay?
20.	5. pricing strategies		- cost-plus: determine your costs, set a margin for your profit (not always most strategic) - competition-based: going rate, same as similar products - price leadership: "undercut leader", leads to price war, not always feasible for small companies - target-cost: pick price, design around that target price by reverse engineering it (needs time) - yield management: things that are time based like plane seats; save quantity and price according to necessity at a given time - value-based: EVC economic value to customer (usefulness) - EDLP - skim/penetrate/trial prices
21.	e-commerce pricing		opens to a wider audience, especially for select luxury items in which desired customers and spread about geographically
22.	payment pricing		Give price in payment amounts, not full price. (e.g. cars)