customary price

Examples of customary price in the following topics:

• Psychological Pricing

  • Products and services frequently have customary prices in the minds of consumers.
  • A customary price is one that customers identify with particular items.
  • Candy bars now cost 60 cents or more, which is the customary price for a standard-sized bar.
  • Manufacturers tend to adjust their wholesale prices to permit retailers to use customary pricing.
  • Psychological pricing is one cause of price points.

• Demand-Based Pricing

  • Demand-based pricing, also known as customer-based pricing, is any pricing method that uses consumer demand - based on perceived value - as the central element.
  • These include: price skimming, price discrimination, psychological pricing, bundle pricing, penetration pricing, and value-based pricing.
  • Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time.
  • Penetration pricing is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers.
  • By definition, long term prices based on value-based pricing are always higher or equal to the prices derived from cost-based pricing.

• Competitor-Based Pricing

  • Competition-based pricing describes a situation where a firm has a pricing policy that reflects the pricing decisions of competitors.
  • Competition-based pricing describes the situation where a firm does not have a pricing policy that relates to its product, but reflects the pricing decisions of competitors.
  • Similar to competition based pricing, going rate pricing reflects the price that is being used by most of the companies within the industry, an industry standard more or less.
  • It can lead to price wars.
  • Show the basis of competitor-based pricing as a general pricing strategy

• Cost-Based Pricing

  • Cost-based pricing is the act of pricing based on what it costs a company to make a product.
  • Cost-based pricing is the act of pricing based on what it costs a company to make a product.
  • Cost-based pricing involves setting a price such that:
  • Cost-based pricing is included in what is considered the "3 C's" of pricing.
  • Describe cost based pricing as it relates to general pricing strategies

• High/Low Pricing

  • High-low pricing is a strategy where most goods offered are priced higher than competitors, but lower prices are offered on other key items.
  • High-low pricing is a method of pricing for an organization where the goods or services offered by the organization are regularly priced higher than competitors.
  • The lower promotional prices are designed to bring customers to the organization where the customer is offered the promotional product as well as the regular higher priced products.
  • High-low pricing is a type of pricing strategy adopted by companies, usually small and medium sized retail firms.
  • The way competition prevails in the shoe industry is through high-low price.

• Value-Based Pricing

  • Value-based pricing seeks to set prices primarily on the value perceived by customers rather than on the cost of the product or historical prices.
  • Value-based pricing sets prices primarily, but not exclusively, on the value, perceived or estimated, to the customer rather than on the cost of the product or historical prices.
  • How important is price?
  • Examples include matching the price of competitors, a traditional price charged for a particular product, and charging a price that covers expected costs.
  • Examine the rationale behind value based pricing as a pricing tactic

• Settling the List Price

  • A list price must be close to the maximum price that customers are prepared to pay and yield the maximum profit for the retailer.
  • Pricing is a key variable in micro-economic price allocation theory and part of the four "P's-" of the marketing mix; pricing, product, promotion and place.
  • The manufacturer's suggested retail price (MSRP), list price or recommended retail price (RRP) of a product is the price which the manufacturer recommends to the retailer.
  • Retailers must ask questions to set a list price.
  • A good pricing strategy is one that strikes a balance between the price floor (the price below which the organization ends up in losses) and the price ceiling (the price beyond which the organization experiences a no demand situation).

• Terms Used to Describe Price

  • We've been using the word "price" a lot.
  • The price of an item is also called the price point, especially where it refers to stores that set a limited number of price points.
  • Price is relatively less than the cost price.
  • Service providers may present you with a fee list as opposed to a price tag if you ask for the price of their services.
  • The price to ride a bus is expressed by the term "fare

• Price Discrimination

  • Price discrimination is the sale of identical goods or services at different prices from the same provider.
  • Price discrimination also occurs when the same price is charged for goods with different supply costs.
  • Price discrimination's effects on social efficiency are unclear; typically such behavior leads to lower prices for some consumers and higher prices for others.
  • Price varies according to demand: larger quantities are available at a lower unit price.
  • Construct the concept of price discrimination relative to legal concerns in pricing

• Geographic Pricing

  • Geographical pricing is the practice of modifying a basic list price based on the geographical location of the buyer.
  • Uniform delivery pricing (also called postage stamp pricing): The same price is charged to all.
  • Zone pricing: Prices increase as shipping distances increase.
  • Zone pricing is also used to price fares in certain metro stations.
  • Describe the different types of geographic pricing from a pricing tactic perspective