5.1 AMA PCM Pricing Concepts & Methods Questions and Answers (100% Pass)

Above-, At- Below-Market Pricing Setting a market price for a product or product class based on a subjective feel for the competitors' price or market as the benchmark. Bait Pricing (or Bait and Switch) A product is promised at a low price but is either not in stock or a less attractive product is sold. Barter A form of trade in which people exchange goods and services without the use of money. Break-Even Point The point at which the money from product sales equals the costs of making and distributing the product. Bundle Pricing Master01 | November, 2024/2025 | Latest update 1 | P a g e | © copyright 2024/2025 | Grade A+ Selling distinct multiple items offered together at a special price. Captive Pricing Pricing the basic product in a product line low, while pricing related items higher Competition-Based Pricing A pricing strategy based on what all the other competitors are doing. Competition-Oriented Pricing Approach A pricing strategy that is based upon what the competition does. Cost-Oriented Pricing Approach Pricing approaches in which a price-setter stresses the cost side of the pricing problem, not the demand side. Price is set by looking at the production and marketing costs and then adding enough to cover direct expenses, overhead, and profit. Demand Curve Master01 | November, 2024/2025 | Latest update 1 | P a g e | © copyright 2024/2025 | Grade A+ A graph illustrating how much of a given product a household would be willing to buy at different prices. Cost-Plus Pricing Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price Discounts Temporary price reductions, often employed to boost sales. Everyday Low Pricing long-term pricing stra