12 good questions and answers about "Price Adjustment Strategies"

What is segmented pricing?
Differentiated pricing based on customers, products, locations, time, but not the difference on costs.
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What is necessary to do segmented pricing? Name 3?
1. Market should be easily segmented
2. Costs of segmenting do not cross benefits
3. Different degrees of demand
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What is psychoogical pricing?
A way of pricing where the price is supposed to express something for the product where the consumers lack the information of valuing it.
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What is reference pricing?
Includes pricing that consumers have in their mind by assessing a situation, past prices, or observing a current price. Sellers use prices to signal difference in products.
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What is promotional pricing?
A strategy of offering low prices to products, sometimes below costs to increase the short-run sales.
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Name 2 types of examples of promotional pricing?
1. Discount
2. Cash rebates
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What is the risk in using promotional pricing too often? Name 2?
1. Can make the brand loose its value in front of consumers' eyes
2. Influence deal-prone (waiting to buy until they are sales)
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What is uniform delivered pricing?
The firm charges the same price and added freight for all customers, no matter the location.
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What is zone pricing?
The buyers close to the zone pay the same, while the ones that are further, pay a higher price based on the distance.
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What is basing point pricing?
Charges prices based on the distance of buyers from a base-city location, regardless of the city from which goods are shipped.
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When is freight absorption usually used? Name 2.
1. Market penetration
2. Very competitive markets
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What is international pricing?
This depends on the economic conditions, competitive situations, laws, development of retailing systems. Price can differ because of preceived value in different countries, for example third world countries.
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