Pricing Strategies and
Factors in Business:
Comprehensive Pricing
Strategy Study Guide
|Guaranteed success|
, Terms in this set (65)
What is the definition of price? Price refers to the total cost for customers to acquire a product, including both
monetary and psychological costs. amount of money needed
What are the two forms of cost in pricing? Variable Cost and Fixed Cost.
What is a Variable Cost? Expenses that vary directly with the level of production.
What is a Fixed Cost? Expenses that do not vary with the level of production or sales; also known as
overhead costs.
What is the first step in developing a pricing strategy? Objective setting.
What are the three types of objectives in pricing Sales-based, Profit-based, and Status Quo based.
strategy?
What does a Sales-Based objective focus on? Increasing sales growth and maximizing market share.
What is a Profit-Based objective? Maximizing profit and optimizing the return on investment or security early
recovery of cash
What does a Status Quo Based objective aim for? Maintaining market position, customer loyalty, and stable prices. the goal of the
company is to maintain good image to the community by protecting welfare
and goodwill
What is Broad Price Policy? Procedures, rules, and methods that link prices with the target market and
ensure coordination in pricing decisions.
What is Penetration Pricing? A strategy that uses low prices to attract a larger market for a product or
service. the preference of mass majority will be the basis of the price set
What is Skimming Pricing? A strategy that uses high prices to attract customers who value product quality
or uniqueness. uses high prices to determine who will patronize the product
Factors in Business:
Comprehensive Pricing
Strategy Study Guide
|Guaranteed success|
, Terms in this set (65)
What is the definition of price? Price refers to the total cost for customers to acquire a product, including both
monetary and psychological costs. amount of money needed
What are the two forms of cost in pricing? Variable Cost and Fixed Cost.
What is a Variable Cost? Expenses that vary directly with the level of production.
What is a Fixed Cost? Expenses that do not vary with the level of production or sales; also known as
overhead costs.
What is the first step in developing a pricing strategy? Objective setting.
What are the three types of objectives in pricing Sales-based, Profit-based, and Status Quo based.
strategy?
What does a Sales-Based objective focus on? Increasing sales growth and maximizing market share.
What is a Profit-Based objective? Maximizing profit and optimizing the return on investment or security early
recovery of cash
What does a Status Quo Based objective aim for? Maintaining market position, customer loyalty, and stable prices. the goal of the
company is to maintain good image to the community by protecting welfare
and goodwill
What is Broad Price Policy? Procedures, rules, and methods that link prices with the target market and
ensure coordination in pricing decisions.
What is Penetration Pricing? A strategy that uses low prices to attract a larger market for a product or
service. the preference of mass majority will be the basis of the price set
What is Skimming Pricing? A strategy that uses high prices to attract customers who value product quality
or uniqueness. uses high prices to determine who will patronize the product
