According to businessdictionary.com, demand-backward pricing is a pricing method in which the actual costs of the product are deducted from what the consumer is willing to pay. If a satisfactory profit is still reached, the method can be considered successful.Know More
As the name suggests, demand-backward pricing involves working backward. Producers estimate what they believe the consumer would be willing to pay and then adjust accordingly until the proper figure is reached. This method is especially popular in women's and children's shopping items, such as beauty products, clothes, shoes and toys. Items that are commonly gifted also fit this criterion, as the buyer will typically decide beforehand how much he or she is willing to spend.
Once the final price is reached, if wholesalers are not successful in selling the product, producers typically adjust not the price but the quality of the components. Therefore, the cost of the product is generally resistant to the effects of the market.
The pharmaceutical industry also engages in this method of pricing. Because the per-unit cost of drugs is typically much lower than the consumer price, the pharmaceutical industry makes incredible profit. People who need these drugs often have little choice but to pay the price.Learn more about Marketing & Sales
The four basic methods of making pricing decisions are cost-plus pricing, demand pricing, markup pricing and competitive pricing. These methods are used to determine the optimal price that a customer is willing to pay for a product or service.Full Answer >
"Trade marketing" is an area of marketing focused on driving demand of distributors and retailers for manufactured goods. Trade marketing includes trade promotions that are tailored toward these larger groups to set products apart from the competition, grow product visibility and create better purchasing rates. Trade marketing is a smaller subset of marketing and is a different field from consumer marketing that relies on customer strategies to drive sales.Full Answer >
The term "sales promotion" refers to a type of marketing that is either targeted toward the distribution channel (by providing incentives for sales) or directly at the consumer. It is a tactic for introducing new items, emptying inventories, building traffic and giving sales a little boost.Full Answer >
Direct marketing is an advertising strategy that physically deals and communicates with the consumer, while indirect marketing advertises in quantity by mass media outlets, such as Internet, TV and radio ads. Direct marketing methods include telemarketing, subscriptions and fliers.Full Answer >