Scribd Logo
Upload

Welcome to Scribd!

  • 5 views

    Pricing Strategy Terminology

    Uploaded by

    marissa rivera

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Pricing Strategy Terminology

    Uploaded by

    marissa rivera
    5 views2 pages

    Original Title

    PRICING STRATEGY TERMINOLOGY

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    5 views2 pages

    Pricing Strategy Terminology

    Uploaded by

    marissa rivera

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 2

    PRICING TERMINOLOGIES

    Pricing Terminology - The world of strategic pricing management has a


    vocabulary of its own. Here are definition of some of the more common terms
    and phrases that are used on this site and among price consultants worldwide.

    COMPETITIVE MATCH PRICING METHODOLOGY - Utilizing competitive


    prices to gauge the setting and adjustment of prices. Prices may be higher, lower
    or the same as competitors. Fails to consider costs or perceived value but useful
    when combined with cost-plus and value based methodologies.

    COST-PLUS PRICING - A common pricing approach that utilizes cost with an


    applied margin factor to derive at a price. A sure fire way to guarantee margins
    but frequently leaves money on the table. Useful in setting pricing floors.

    CUSTOM VALUE - Value that is created as a result of customized product


    features or services for specific customers or market segments. Custom value
    typically offers premium price opportunities to capture incremental pricing
    revenue.

    DISCOUNT CONTAINMENT - Correcting and controlling the discounts on


    products and services in order to improve profit margins.

    ECONOMIC VALUE - The economic sum of all value perceived by a customer


    or market segment. Provides a platform to calculate prices in B2B environments.

    EXPERT JUDGMENT - Strategic pricing management expertise applied to


    price decisions.

    INCREMENTAL PRICING REVENUE - Additional revenue as a result of price


    improvement.

    INCUMBENT VALUE - Value perceived by the customer based on the existing


    relationship with the supplying firm. When measured accurately, can be
    converted into incremental pricing revenue.

    NON-LINEAR PRICING - Discount pricing schedules.

    POCKET PRICE - The final price after all on-invoice and off-invoice discounts,
    rebates, give backs, incentives, etc.
    PRICING TERMINOLOGIES Page 1
    POCKET PRICE WATERFALL - The graphical display of all discounts and
    other give-backs that negatively affect price with the end result showing the net
    or pocket price.

    PRICE BAND ANALYSIS - The graphical distribution of net prices by


    customers. Indicates the number of customers paying a specific price and the
    consistency of pricing across all customers.

    PRICE OPTIMIZATION - The price that delivers the maximum profit.

    PRICE SIGNALING - Legally messaging price intentions to an industry.

    PRICE THRESHOLD - The maximum price a customer is willing to pay.

    PRICE VALUE MAPPING - A graphical display of the competitive position of a


    product according to perceived price versus perceived benefits.

    PRICING SEGMENTATION - Dividing business transactions into common


    characteristics for the purpose of optimizing price.

    RELEASE PRICE - The price of a new product of service at the time of launch.

    STRATEGIC VALUE - Value that is created as a direct result of a firm’s


    competitive strategy.

    TRANSACTIONAL PRICING - The most granular form of pricing that


    manages prices on a transaction-by-transaction basis. Requires significant data
    derived from individual transactions but can make large contributions to margin
    improvement.

    VALUE BASED PRICING - Setting prices according to the perceived value of


    the customer. In order to perform value based pricing properly, data and
    information supporting the perception of value by the customer is required.

    VALUE PERCEPTION - The value that customers place on a purchased


    product of service. Requires market research to identify.

    PRICING TERMINOLOGIES Page 2

    You might also like