Breakeven Pricing

A cost pricing method used to set a product’s initial price that is used in association with Breakeven Analysis and the determination of minimum sales levels needed at different pricing points in order for a company to cover fixed costs.

Above Competition Pricing

A competitive pricing method in which initial price is set at levels intended to be above competitors’ prices.

Bundle Pricing

A form of promotional price adjustment that offers discounted pricing when customers purchase several products at the same time.

Market Pricing

A process for setting the initial price for a product that relies on analysis of market research to determine what customers perceive as an acceptable price and includes such methods as Backward Pricing, Psychological Pricing and Price Lining.

Promotional Pricing

A form of sales promotion and a form of special pricing program, used in both consumer and business markets, that is designed to increase product demand by offering a short-term price reduction (i.e., sale price).

Cost Pricing

A process for setting the initial price for a product that primarily looks at production costs as the key factor for setting price and includes such methods as Markup Pricing, Cost-Plus Pricing and Breakeven Pricing.

Psychological Pricing

A market pricing method that used to set a product’s initial price by considering customers’ perceived response to a price and includes Odd-Even Pricing and Prestige Pricing.

Cost-Plus Pricing

A cost pricing method used to set a product’s initial price by applying a fixed monetary amount to the cost of the product.

Dynamic Pricing

A form of promotional price adjustment where adjustments take place at the point-of-sale (i.e., at the time and place of purchase) for customers meeting certain criteria established by the seller (e.g., first time visitor to website).

Markup Pricing

A cost pricing method used to set a product’s initial price by applying a certain percentage to the cost of the product either through a Markup-on-Cost method or a Markup-on-Selling Price method.