1. PRICE
VOCABULARY

2. Price
• The value of a product expressed in dollars.

3. Break-Even Point
• Point at which revenue from sales equals
costs.

4. Break-Even Point
• $5.75 x 200 = number of boxes purchased
• 200 x 15 = number of candy bars purchased
• $5.75/15 = cost per unit
• $1 – cost per unit = profit per candy bar

5. Break-Even Point
• You are holding a school fundraiser by selling
candy bars.
• It costs the school $5.75 per box of candy bars
and there are 15 candy bars in a box.
• You are selling the candy bars for $1 a piece.
• If the school buys 200 boxes of candy bars
how many bars will you need to sell to break-
even?

6. Pricing Objectives
• Goals that tell what a marketer wants to
achieve through pricing.

7. Psychological Pricing
• Set of pricing techniques used to create an
image of a product to entice customers to buy.

8. List Price
• Established price of a product as published in
a catalog or on a price tag.

9. Market Price
• Actual price you pay for a product, after any
discounts or coupons are deducted.

10. Price-Fixing
• Situation in which a group of competitors gets
together and sets (fixes) the price for a
specific product; they then all agree to sell
that product for the same price.

11. Price Discrimination
• Situation in which a company plays favorites
by charging lower prices to some companies
for the same products.

12. MSRP
• The retail price that the manufacturer
recommends.

13. Unit Pricing
• Displaying the price of an item based on a
standard unit of measure, such as an ounce or
a pound.

14. Return on Marketing
Investment (ROMI)
• Ratio that ells a business how much it earned
as a percentage of the investment it made to
earn the money.

15. Price Channels
Retailer
Manufacturer Wholesaler Consumer

16. Discount Pricing
• Business that sell to other businesses often
use discount pricing.
• Discount pricing offers a reduction from the
regular or list price of a product.

17. Cash Discount
• A reduction in price is offered to retailers who
pay their bills promptly. (B2B)

18. Promotional Discount
• A discount is given in exchange for the
customers promoting the product. (B2B)

19. Quantity Discount
• A discount is given for a large order. (B2B)

20. Seasonal Discount
• A discount is given when a retailer buys in
advance of the season. (B2B)

21. Trade Discount
• A discount is given as a way to quote the price
to the customer, based on the list price of
MSRP. (B2B)