Flashcards
BUS 371 CH 13A KEY TERMS
Flashcards do conjunto (6)
- 1Cost-plus pricingA pricing method in which a predetermined markup is applied to a cost base to determine the target selling price.
- 2Economic value to the customer (EVC)The price of a customer’s best alternative (called the reference value) plus the value of what differentiates a product from that alternative (called the differentiation value).
- 3MarkupThe difference between the selling price of a product or service and its cost. The markup is usually expressed as a percentage of cost.
- 4Price elasticity of demandA measure of the degree to which a change in price affects the unit sales of a product or service.
- 5Target costingThe process of determining the maximum allowable cost for a new product and then developing a prototype that can be profitably made for that maximum target cost figure.
- 6Value-based pricingA pricing method in which a company establishes selling prices based on the economic value of the benefits that their products and services provide to customers.