Pricing Dictionary
Talk pricing like a pro
The pricing of products that have both a "core product" and a number of "accessory products."
Competitor-Based Pricing
Utilizing competitor prices as a pricing benchmark instead of company costs or customer value.
Cost Plus
Where a price is established by evaluating all variable costs a company incurs and adding a markup percentage.
A strategy that offers incentives to purchase aside from just getting the base product being paid for.
Customized Pricing
To tailor the prices of goods or services for specific customer preferences.
Discount
To deduct a certain percentage off the original market price.
Economy Pricing
A method of pricing in which a low price is assigned to a product with decreased production costs.
Face Value
The initial nominal dollar value.
A consistent price per unit regardless of the amount purchased.
A business model that offers free and premium packages. Basic services are offered for free, and customers are able to upgrade to premium packages for more services.
To adjust the selling price of a product or service according to a customer’s location.
A method of pricing in which price is based off of current market conditions.
A psychological pricing tactic in which numeric value is utilized to affect the customer's perception of product value.
When a company sells a base product at a relatively low price, but sells complementary accessories at a higher price.
To set a price over the actual value of the product.
When a company strategically lures customers away from a competitor by setting a low initial price.
When a seller strategically uses pricing as a key tool to achieve their business and financial aims.
A method of pricing in which a seller sets a price so low that other suppliers cannot compete and are forced to exit the market.
A markup on the original market price of an item used to create an illusion of higher quality.
Comparing one's prices to the prices of competitors in a particular market segment.
Combining several products or services into a single comprehensive package for an all-inclusive reduced price.
When a pricing expert or professional offers strategic advice on future pricing plans.
Restrictions implemented by the government on the pricing of products and services.
An analytical representation of the average price levels in the market.
A pricing strategy that charges different segments of customers altered prices for the same products or services.
A measure of customer responsiveness in terms of demand for a certain product or service by adjusting the product or service price. More specifically, it provides the percentage of quantity demanded for a product or service in response to a one percent change in price.
A passive seller in a market whose pricing strategies compete to match the dominant seller in that market: the price leader.
A normalized average of prices for a given type of product or service in a given sector, during a given interval of time.
The dominant seller in a market whose pricing strategies are competitively matched by the rest of the sellers in that market.
When a buyer and seller have a discussion to determine the price of product or service that is acceptable to both parties. At the end of the negotiation, either a deal is reached or there is no sale.
A strategic price which maximizes demand and revenue for a product or service.
A pricing technique that utilized four questions to derive consumer preferences data.
When there is little to no change in the economy over a period of time. This means that there is a lack of inflation or deflation occurring with prices.
Where businesses attempt to gain an advantage through competitive price cuts.
The process of assigning a numerical value of monetary payment to be given in exchange for a product or service.
A long or short-term plan of price-related decisions that a company commits to in order to maximize revenue.
The process of selling a group of items as a combination package for a discounted price.
Utilizing analytical and tactical techniques to maximize the effectiveness of pricing.
When a seller reduces the price of a product or service to attract customers as a marketing or sales tactic.
A pricing strategy that utilizes specific techniques to form a psychological or subconscious impact on consumers.
The price charged to customers for purchases from a seller or retailer.
A pricing model that allows the consumer to establish the pricing requirements and allow the seller to compete for their business.
Assigning a relatively higher price for a product or service.
A pricing method used by sellers to segment the prices of their products and services based on specified target markets.
The pricing of a product or service that is far lower than the value of what is being sold.
Basing a product or service's price on how much the target consumers believes it is worth.
Dutch economist who created the Price Sensitivity meter in 1976 to measure the value-based pricing.
A pricing method that derives the price of a product or service off of the velocity of its stock turn. The slower the turn, the higher the price.
The lowest price that a buyer is willing to accept from a seller before they are no longer interested in purchasing.
The cost of buying items in bulk.
A profit maximization technique that makes strategic price adjustments to a product or service with a fixed expiration date.
