Pricing Concepts and Strategies

The amount of money or goods and services given up to acquire something.

A ratio expressing the quantity of money or goods/services given by the buyer compared to the quantity received by the seller.

Various terms used instead of the term 'price'.

A pricing objective focused on achieving a desired profit or financial outcome.

A pricing objective centered around achieving a specific sales volume.

A pricing objective driven by the actions of competitors in the market.

Setting a price for a product or service.

The act of establishing a price for a rental property.

The price per unit of each product or service offered by a company.

The costs incurred to produce or deliver each unit of a product or service.

Costs that remain constant regardless of the volume of production or sales.

The quantity of each product or service produced and sold by a company.

The relative proportion of different products or services sold by a company.

A pricing strategy where a company aims to achieve the highest possible profit.

A pricing strategy that uses relatively high prices to maximize profit per unit.

A pricing strategy where companies target achieving a specific percentage return on the total capital invested in a business. It focuses on ensuring profitability by setting prices that yield the desired return.

A common pricing objective where companies set prices to achieve a desired sales volume. This can involve increasing sales or maintaining existing sales levels.

A pricing strategy that considers existing market share and aims to increase it through lower prices. This can lead to increased unit sales and potentially higher overall profits.

A pricing strategy where companies intentionally maintain a stable price level, even if market conditions change. This often involves focusing on non-price competition, such as quality, service, or brand image to attract customers.

A type of competition where companies try to differentiate themselves through factors other than price, such as product quality, customer service, or brand image.

The relationship between market share and profitability. While there may be some correlation, it is not a guarantee that a larger market share will always lead to higher profits. Factors like brand reputation and pricing strategies play a crucial role.

Companies setting high prices and focus on offering superior quality products or services to establish a strong position in a specific market. This strategy relies on attracting customers willing to pay a premium for quality.

A long-term pricing strategy that aims for long-term profitability, even if short-term profits may be lower. Companies using this strategy prioritize building brand value, strong customer relationships, and sustaining their position in the market.

A pricing strategy that aims to capture a large market share by setting prices lower than competitors, often used during early product life cycles or in growing markets.

A pricing objective aimed at maximizing sales volume, often used when a company wants to grow its customer base quickly.

A pricing objective driven by the need to introduce a new product to the market quickly and gain an early advantage.

This strategy is used when prices are set low to increase consumer interest in a product and rapidly increase sales.

A pricing objective where a company aims to be the leader in setting prices for products or services within a specific industry.

A pricing objective used when a company wants to control the competitive landscape by making it difficult for new competitors to enter the market due to low prices.