Pricing Strategies

This text illustrates the different pricing strategies marketers use, which are observable by consumers. The firm's pricing strategy must be set to satisfy consumer needs and provide a proper financial return to the marketer.

Review Questions

  1. Explain the difference between a penetration and a skimming pricing strategy.
  2. Describe how both buyers and sellers use sealed bid pricing.
  3. Identify an example of each of the following: odd-even pricing, prestige pricing, price bundling, and captive pricing.
  4. What is the difference between FOB origin and FOB destination when paying for shipping charges?
  5. Explain how trade allowances work.