MCS 1000 Lecture Notes - Lecture 13: Price Discrimination
Document Summary
Above-, at-, or below-market pricing: setting prices based on pricing of similar products in the market. Loss-leader pricing: selling products below their customary prices to attract attention to them in the hope that customers will buy other products as well. Step 5: setting the list or quoted price: One price policy (aka fixed pricing): one price for all buyers of a product. Flexible price policy (aka dynamic pricing): variable prices depending on buyers and buying situations. Price war: successive price cutting by competitors to increase or maintain unit sales/market share. Step 6: making special adjustments to the list or quoted price. Discounts: quantity, seasonal, trade (functional): takes future transactions into account, cash: discount if bill is paid quickly. Allowances (for performing some activity: trade-ins, promotions. Geographical (reflects the cost of transportation: free on board (fob) origin pricing: buyer is responsible for picking up and unloading delivery, uniform delivered pricing: includes all transportation costs.