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MARK-UP or COST-PLUS PRICING |
is the method of adding a certain percentage of a mark-up to the cost of the product to determine the selling price |
MARK-UP |
the amount by which the price of something is increased before it is sold again |
MARKET PENETRATION PRICING |
is a pricing strategy that sets a low initial price for a product. The goal is to quickly attract new customers based on the low cost. The strategy is most effective for increasing market share and sales volume while discouraging competition. |
MARKET SKIMMING |
a pricing approach in which the producer sets a high introductory price to attract buyers with a strong desire for the product and the resources to buy it, and then gradually reduces the price to attract the next and subsequent layers of the market. |
PRESTIGE PRICING |
- a pricing strategy in which prices are set at a high level, recognising that lower prices will inhibit sales rather than encourage them and that buyers will associate a high price for the product with superior quality; also called Image Pricing |
GOING RATE PRICING |
is a method adopted by the firms wherein the product is priced as per the rates prevailing in the market especially on par with the competitors |
DIRECT COSTS |
– the cost of the materials and the workers that are involved when a company makes a particular product or provides a particular service |
INDIRECT COSTS |
the cost of something that is not directly involved in making a particular product or providing a particular service, for example, the cost of renting a building or of training staff |
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