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breakeven point
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the point at which the costs of producing a product equal the revenue made from selling the product
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Contribution Margin
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Sales - Variable Costs
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sales oriented pricing
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A category of pricing objectives that focus on increasing total amount of income from sales
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status quo pricing
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a pricing objective that maintains existing prices or meets the competition's prices
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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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price fixing
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an agreement among firms to charge one price for the same good
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predatory pricing
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selling a product below cost to drive competitors out of the market
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price discrimination
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the business practice of selling the same good at different prices to different customers
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market entry pricing
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skimming and penetration
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CLV (customer lifetime value)
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measures how much profit a firm is expected to make from a single customer, throughout the duration of the relationship with the customer- the present value of all future income
CR= customer revenues
C= customer costs
R= retention rate
D= discount rate
AC= acquisition rate for all periods ranging from 1 to N
CR= customer revenues
C= customer costs
R= retention rate
D= discount rate
AC= acquisition rate for all periods ranging from 1 to N
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Markup
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the amount added to the cost of merchandise to establish the selling price
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Average costs (AC)
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total costs per unit of output
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marginal costs/benefits
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the costs and benefits of producing one additional unit of a good or service
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Unit Margin
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price - unit variable cost
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price elasticity of demand
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a measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price
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total fixed cost
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the sum of those costs that are fixed in total - no matter how much is produced
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total variable cost
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the cost of the firm's variable factor of production - the cost of labor
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brand loyalty
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consistent preference for one brand over all others
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