?Sale price – temporary price cuts.
Payment terms and cash discounts ?Cash discounts – to pay quickly
?Net: payment for the face value of the invoice is due immediately.
?2/10,net 30: the buyer can take a 2% discount off the face value of the invoice if the
invoice is paid within 10 days. The full face value is due within 30 days.
Allowance and rebates
?Allowances: like discounts are given to final consumers, or channel members for doing something or accepting less of something.
?Advertising allowances – to channel members for promotion. ?Stocking allowances – to intermediaries for shelf space.
?Push money(or prize money) allowances – to retailers to pass on to the salesclerks for selling certain items.
?Trade-in allowances (given the used products when similar new products are bought) – for used products.
?Rebates – refunds to consumers after a pruchase.
Geographic pricing policies
F.O.B. Common Geographic Pricing Policies Zone Uniform Delivered Freight Absorption FOB: free on board
Zone pricing: making an average freight charge to all buyers within specific geographic areas.
Uniform delivered pricing: making an average freight charge to all buyers.
Freight absorption pricing: absorbing the freight cost so that a firm’s delivered price meets the nearest competitor’s.
Legal issues affecting pricing policies
?Price fixing is illegal ?Price discrimination ?Predatory pricing
?Resale price maintenance