| Strategy | A broad plan of action by which an organization intends to reach its objectives.
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| Price competition | A strategy in which a firm regularly offers products priced as low as possible, usually accompanied by few, if any, services.
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| Value pricing | A form of price competition in which a firm seeks to improve the ratio of a product's benefits to its price and related costs.
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| Nonprice competition | A strategy in which a seller maintains stable prices and attempts to improve its market position by emphasizing other (nonprice) aspects of its marketing program.
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| Market-skimming pricing | A strategy in which the initial price of a product is set high in relation to the target market's range of expected prices.
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| Market-penetration pricing | A strategy in which the initial price of a product is set low in relation to the target market's range of expected prices.
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| Predatory pricing | Driving competitors out of the marketplace by giving away products or charging a far-below-the market price.
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| Quantity discount | A deduction from a seller's list price that is offered to a buyer when a large quantity of the product is purchased.
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| Noncumulative discount | A quantity discount based on the size of an individual order of one or more products.
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| Cumulative discount | A quantity discount based on the total volume purchased over a specified period.
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| Trade (functional) discount | A reduction from the list price that is offered by a seller to buyers in payment for marketing functions the buyers will perform. Same as functional discount.
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| Cash discount | A deduction granted to buyers for paying their bills within a specified period.
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| Rebate | A discount on a product that a customer obtains by submitting a form or certificate provided by the seller.
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| Price customization | Method of establishing prices based on how much different people value a product.
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| Seasonal discount | A deduction from the list price that is offered to a customer for placing an order during the seller's slack season.
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| Promotional allowance | A price reduction granted by a seller as payment for promotional services performed by buyers.
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| Price discrimination | A situation in which different customers pay different prices for the same product.
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| Robinson-Patman Act | A federal law passed in 1936 that was intended to curb price discrimination by large retailers and the granting by manufacturers of proportionally unequal promotional allowances to large retailers or wholesalers.
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| FOB mill pricing | See FOB factory pricing.
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| Uniform delivered pricing | A geographic pricing strategy whereby the same delivered price is quoted to all buyers regardless of their locations. Same as postage stamp pricing.
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| Zone-delivered pricing | A geographic pricing strategy whereby a seller divides its market into a limited number of broad geographic zones and then sets a uniform delivered price for each zone.
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| Freight-absorption pricing | A geographic pricing strategy whereby the seller pays for (absorbs) some of the freight charges in order to penetrate more distant markets.
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| One-price strategy | A pricing strategy under which a seller charges the same price to all similar customers who buy identical quantities of a product.
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| Flexible-price strategy | A pricing strategy under which a seller charges different prices to similar customers who buy identical quantities of a product. Same as variable-price strategy.
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| Flat-rate pricing | Arrangement where a purchaser pays a stipulated single price and then can consume as much or as little of the product as desired.
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| Single-price strategy | An extreme variation of a one-price strategy in which all items sold by a firm carry a single price.
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| Price lining | A pricing strategy whereby a firm selects a limited number of prices at which it will sell related products.
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| Odd pricing | A psychological pricing strategy that consists of setting prices at uneven (or odd) amounts, such as $4.99, rather than at even amounts, such as $5, in the belief that these seemingly lower prices will result in larger sales volume.
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| Leader pricing | A pricing and promotional strategy in which temporary price cuts are made on a few items to attract customers.
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| Leader | In leader pricing, an item on which price is cut.
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| Loss leader | In leader pricing, an item on which price is cut to a level that is below the store's cost.
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| Unfair-practices acts | State laws intended to regulate some forms of leader pricing that are intended to drive other products or companies out of business. Same as unfair-sales acts.
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| High-low pricing | A pricing strategy that combines frequent price reductions and aggressive promotion to convey an image of very low prices.
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| everyday low pricing (EDLP) | A pricing strategy that involves consistently low prices and few, if any, temporary price reductions.
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| Resale price maintenance | A pricing policy whereby a manufacturer seeks to control the prices at which middlemen resell their products.
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| Suggested list price | A pricing policy whereby a manufacturer recommends to retailers a final (retail) price that should provide them with their normal markups.
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| Price war | A form of price competition that begins when one firm decreases its price in an effort to increase its sales volume and/or market share, the other firms retaliate by reducing prices on competing products, and additional price decreases by the original price cutter and/or its competitors usually follow.
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