Price stability is important for economic stability, making it easier for consumers to understand product values and for companies to plan long-term investments. However, critics argue that it can limit flexibility and ingenuity, and maintaining price levels can lead to high costs. Most economies aim to reduce shifts in both inflation and deflation to an […]
Prestige pricing is a marketing strategy where higher prices are charged to give the impression of added value, often used by famous brands. The strategy is not linked to quality but rather image, and is intended to capitalize on buyers’ notions that a high-priced item is of superior quality. However, some people see it as […]
Sticker price is the listed price of an item, often the MSRP, and may be negotiable. It is commonly used in the context of automobiles, where researching the invoice price can help consumers get a better deal. The science of sticker pricing is complex, with industry tricks like ending prices in “9” or “5” to […]
Price systems regulate production and consumption by determining the value of goods. Free systems rely on supply and demand, while fixed systems are controlled by the government. Mixed systems combine both approaches and are common in modern economies. A price system in the economy has the function of regulating the production and consumption of goods […]
The offer price of a stock is determined by investment bankers, lawyers, and company executives based on factors such as investor demand and similar stocks in the sector. A successful road show can lead to a higher offer price, while a lackluster one can result in a lower listing price or a delay of an […]
The domestic price level is the current price of goods and services in an economy, with the consumer price index being the most common. Free market economies use price as the determining factor between supply and demand, but government intervention can cause unnatural changes. The domestic price level is used to calculate inflation, control the […]
Price perception is a marketing strategy that aims to convince customers that expensive items are not that far off in price from less expensive products. Placing expensive products in the same area as less expensive inventory could alter a consumer’s perception of price. However, price perception could work against an organization if a customer feels […]
Price targets must fit into a company’s marketing strategy, with goals such as creating a buzz, matching competitors’ prices, survival pricing, or skimming for luxury items. The pricing process must ensure a good ROI while remaining competitive. Price targets are the goals a company hopes to achieve when deciding the cost of its products or […]
The spot price of silver is determined by supply and demand, with factors such as economic trends, government actions, and manufacturing demand affecting it. The price is set by commodity markets such as COMEX and varies hourly. The spot price of silver is the price quoted for immediate payment and delivery. Settlement and delivery of […]
Chain price index measures changes in prices over time without using a fixed reference point, while a standard price index uses an initial figure as the base period. The chain price index solves the problem of changing contents of the “basket” of goods and services and allows for easier at-a-glance reference. A chain price index […]
Full cost pricing involves adding overhead costs and a fixed margin to the cost of production to create standardized prices. However, it can be difficult to adjust prices to compensate for changes in market conditions. The total cost price includes the cost of making a unit, overhead costs, and a fixed markup. Standardization allows anyone […]
A pricing analyst is responsible for researching, creating comparators, analyzing results, and completing a cost accounting process. The role requires analytical and communication skills and is common in manufacturing, marketing, and advertising. The job involves research, creating a master list, analyzing results, and cost accounting. The skills needed for this role allow for career flexibility, […]
Conversion pricing is the pricing structure of convertible securities, such as preferred shares or bonds, which can be converted into common stock under specific circumstances. The conversion price is fixed at issuance and is usually higher than the current market price, helping to determine the number of shares received and providing higher returns in the […]
The Food Price Index measures the average price of food and explains why prices are rising or falling. It includes five measurements: cereals, sugar, oils and fats, meat, and dairy products. The index is meant for policy makers and food manufacturers to correct factors affecting prices. The index also explains why prices are changing due […]
Unit price is the cost per unit of a product, regardless of packaging, used by both consumers and purchasing managers to determine the true cost of a product. It is important to check unit prices as larger packs may not always have a lower unit price and downsizing is common. Unit price is a valuation […]
Penetration pricing is a marketing strategy that involves using competitive pricing to introduce a new product to consumers or a new market. Once established, the pricing is adjusted to provide a higher profit margin. This differs from price skimming, where a product is introduced at a higher price before being lowered to appeal to a […]
“Pricing upon request” is a term used in advertising when pricing information is not readily available. This can be due to privacy concerns, fluctuating prices, or the personalized nature of a product or service. It can also be used as a placeholder when the price has not been set yet or to discourage casual buyers. […]
Arm’s length transactions occur when subsidiaries of a larger company conduct business as if they are not part of the same corporate family. The arm’s length price ensures fair market value and prevents special discounts. This pricing structure benefits sellers, avoids tax issues, and eliminates conflicts of interest. Countries have laws regarding arm’s length pricing […]
Shadow pricing assigns a monetary value to all aspects of production, including intangible assets, to help managers understand the impact of changes on the bottom line. This includes estimating the cost of intangible assets, such as lost time for skilled workers or environmental damage. Governments also use shadow pricing to determine the full cost of […]
A flash price is a recent price display on a ticker tape that appears when trading is heavy and prices don’t update in real-time. It allows investors to receive information on heavily traded stocks within a reasonable amount of time, but it’s less desirable than receiving up-to-date reports. The incidence of a flash price is […]
