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price
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The amount of money exchanged for a good or service
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value-based pricing
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setting the price at a level that seems to the customer to be a good price compared to the prices of other options
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Good-value pricing
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offering just the right combination of quality and good service at a fair price
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everyday low pricing (EDLP)
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setting prices lower than competitors and then not having any special sales
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high-low pricing strategy
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Setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than competitors'.
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Value-added pricing
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attaching value-added features and services to differentiate a company's offers and charging higher prices
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cost-based pricing
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setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk
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fixed costs
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Costs that do not vary with the quantity of output produced
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total costs
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the sum of the fixed and variable costs for any given level of production
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experience curve
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the drop in the average per-unit production cost that comes with accumulated production experience
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cost-plus pricing
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adding a standard markup to the cost of the product
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Break-even pricing
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setting price to break even on the costs of making and marketing a product, or setting price to make a target return
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competition-based pricing
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setting prices based on competitors' strategies, prices, costs, and market offerings
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target costing
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pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met
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demand curve
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a curve that shows the relationship between the price of a product and the quantity of the product demanded
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price elasticity
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a measure of the sensitivity of demand to changes in price
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inelastic demand
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demand in which changes in price have little or no effect on the amount demanded
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elastic demand
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A situation in which consumer demand is sensitive to changes in price
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