| Competitor-based pricing | A pricing method used to set a price for a product or service based on the competitors’ product prices. |
| Conjoint analysis | A market research method of exploring the relationship between perceived elements of customer value and price. |
| Cost price | Purchase price of a product or service. |
| Cost-plus pricing | A pricing method used to set prices based on the total manufacturing cost of the product plus a target profit margin. |
| Customer value | Quantification of the perceived value of the product or service from a customer’s view. |
| Customer willingness to pay | The maximum price a customer is willing to pay for a product or service. |
| Dynamic pricing | A pricing method used to set prices time-dependent. This method is most often used in the tourist industry, or reverse auction bidding. |
| External price implementation | Implementation and negotiation of prices towards the customers and/or intermediaries. |
| Flatrate pricing | A pricing method used to set a fixed price for consumption of a product or service over a period of time. |
| Internal price implementation | Internal coordination and consensus achievement in the price setting process within a company. |
| Penetration strategy | A price strategy applicable to new products, in which the price is initially set low in order to gain significant market share or to off-set product development cost faster. |
| Power pricing | A pricing method used to aggressively set high prices to maximize profit, but also take significant volume losses into account. |
| Premium price | An amount paid in addition to the regular market price as a result of an advantage/higher value over competitor products. |
| Price | Numerical monetary value assigned to a product or service. |
| Price benchmarking | Comparison of prices of products or services across industries and market segments. |
| Price bundling | Combination of products or services, which are sold at a bundle price. |
| Price communication | Price related communication towards all market participants (customers, competitors, intermediaries, public press etc.). |
| Price controlling | A part of systematic price management which main purpose is to monitor and track pricing related efforts and activities. |
| Price corridor | Systematic representation of the average price levels in the market. |
| Price differentiation | A pricing method used to set different prices for different market segments for the same or similar products or services. |
| Price elasticity | A measure of the change in demand in response to a change in price of a product or service. Low price elasticity indicates little change in demand, whereas high elasticity indicates a relatively large change in demand. Values of price elasticity are usually negative as higher prices mean lower volumes. |
| Price follower | Competitors in the market which follow the price related actions of a price leader. |
| Price index | A normalized average of prices and their development, often categorized by product group or market segment. |
| Price information management | Systematic gathering, storing and processing of price related information for the purposes of a systematic price management. |
| Price leader | Dominant competitor in the market who initiates price related actions such as setting, increasing or cutting prices. |
| Price management | Planning, implementation and governance of all pricing decisions and actions. |
| Price negotiation | A dialogue between a seller and a buyer intended to discuss and produce an agreement upon price and value related issues. |
| Price positioning | Positioning of certain products within a product group by setting a specific price. |
| Price stability | A situation in which the average level of prices is neither moving up nor down. |
| Price strategy | A long-term plan of price related decisions and actions derived from the corporate overall strategy. |
| Price war | A situation in which two or more companies tend to cut prices for competing products to retain or gain market share. |
| Price-demand function | A description of the functional dependence of the demand i.e. sales volume from price. |
| Pricing | The process of determining and assigning a numerical monetary value to a good, service or asset. |
| Pricing manager | A position in a company which is responsible for all pricing related decisions and actions. |
| Pricing process | Procedures, tools, and people skills to determine and implement prices. |
| Pricing tool | An IT-based tool used to support price setting decisions for new products and systematic price management for existing products. |
| Promotional pricing | A pricing method used to temporarily lower prices to increase sales in the short run or gain significant market share. |
| Reverse pricing | A specific form of dynamic pricing, in which the potential customer actively sets the price. The sellers react usually by bidding or accepting the set price. |
| Signal price | A price communicated in an early stage of a negotiation to set a starting point. The signal price is usually not the price which both parties agree on at the end of the negotiation process. |
| Skimming strategy | A price strategy applicable to new products, in which the price is initially set high in order to utilize market segments with low price elasticity. The price is successively reduced to target remaining customer segments with higher price elasticity. |
| Spare-part pricing | A pricing method used to set prices for accompanying products or services to the originating product or service. The margins of the accompanying products tend to be higher than the originating products’. |
| Target price | A price which a buyer or a seller wants to achieve during the negotiation process. |
| Terms and conditions | A set of rules related to pricing, rebates, bonuses, allowances etc. |
| Value calculator | An IT-based pricing tool which quantifies the perceived customer value and uses the results for value-based price setting. |
| Value Pricing | A pricing method which uses the perceived customer value as the main criterion for price setting. |
| Variant pricing | A pricing method to optimize cost-plus pricing for core products and their variants. Often, the variant products are underpriced since lower cost is associated to them, and vice versa for the core products. |
| Velocity pricing | A pricing method which uses the velocity of stock turn as the main criterion for price setting. Fast selling products tend to have low prices, whereas slowly selling products tend to have high prices. |
| Walk-away price | The lowest price a buyer is willing to accept to give to a seller in a negotiation. If the buyer does not accept the walk-away price of the seller, there should be no deal closing. |
