Pricing Strategies

Cost-plus: a method of establishing a selling price in which an agreed percentage is added to the cost price to cover profit.

Value-based:  Pricing method based on the perceived worth of good or service to its intended customers.

 

Competitive: Good, service, or offer that can hold its own against competing products because it offers an attractive value for money proposition to its buyers.

Going-rate: Current percentage rate of a commission, discount, or interest.

 

Skimming: The illegal practice of taking money from cash receipts for personal use. "Skimming" refers to removing the top layer of a liquid. Because a person skimming is not reporting the cash as income it is not reported for taxation purposes, thus making skimming a form of tax evasion.

Discount: Deduction from the par value of a financial instrument, made in advance of its sale.

 

Loss-leader: Good or service advertised and sold at below cost price. Its purpose is to bring in (lead) customers in the retail store (usually a supermarket) on the assumption that, once inside the store, the customers will be stimulated to buy full priced items as well.

Psychological: Having to do with psychology, the study of the human mind and behavior.