Ch 17 Pricing Objective and Policies

Question 1

the amount of money that is charged for “something” of value

Answer 1

Price

Question 2

sets a specific level of profit as an objective

Answer 2

Target return objective

Question 3

seeks to get as much profit as possible

Answer 3

Profit maximization objective

Question 4

seeks some level of units sales, dollar sales, or share of marketing- without referring to profit

Answer 4

Sales-oriented objective

Question 5

don’t-rock-the-pricing-boat objective

Answer 5

Status quo objectives

Question 6

affresive action on one or more of the Ps other than price

Answer 6

Nonprice competition

Question 7

consciously set prices

Answer 7

Administered prices

Question 8

means offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities

Answer 8

one-price policy

Question 9

means offering the same product and quantities to different customers at different prices

Answer 9

Flexible-price policy

Question 10

tries to sell the top (skim the cream) of a market- the top of the demand curve- at a high price before aiming at more price-sensitive customers

Answer 10

Skimming price policy

Question 11

tries to sell the whole market at one low price

Answer 11

Penetration pricing policy

Question 12

temporary price cuts- to speed new products into a market and get customers to try them.

Answer 12

Introductory price dealing

Question 13

are the prices final customers or users are normally asked to pay for products

Answer 13

Basic list prices

Question 14

are reductions offered to encourage customers to buy in larger amounts

Answer 14

Quantity discounts

Question 15

are reductions from the price given by a seller to buyers who either give up some marketing function or provide the funstions themselves

Answer 15

Discounts

Question 16

apply to purchases over a given period0 such as a year- and the discounts usually increase as the amount of purchase increases

Answer 16

Cumulative quantity discounts

Question 17

apple only to individual orders

Answer 17

Noncumulative quantity discounts

Question 18

are discounts offered to encourage buyers to buy earlier than present demand requires

Answer 18

Seasonal discounts

Question 19

means the payment for the face value to the invoice is due immediately.

Answer 19

Net

Question 20

are reductions in prce to encourage buyers to pay their bills quickly

Answer 20

Cash discounts

Question 21

means the buyer can take 2 percent discount off the face value of the invoice if the invoice is paid within 10 days. Otherwise, the full face value is due within 30 days.

Answer 21

2/10, net 30

Question 22

is a list price reduction given to channel members for job they are going to do

Answer 22

Trade (functional) discounts

Question 23

is a temporary discount from the list price

Answer 23

Sales price

Question 24

setting low list price rather than relying on frequent sales, discounts, or allowances.

Answer 24

Everyday low pricing

Question 25

like discounts, are given to final consumers, customers, or channel members for doing something or accepting less of something

Answer 25

Allowances

Question 26

are price reductions given to firms in the channel to encourage them to advertise or otherwise promote the supplier's products locally.

Answer 26

Advertising allowances

Question 27

sometimes called slotting allowances- are given to an intermediary to get shelf space for a product

Answer 27

Stocking allowances

Question 28

sometimes called PM1 or spiffs- are given to retailers bu manufacturers or wholesalers to pass on the retailer's salesclerks for aggressively selling certain items.

Answer 28

Push money ( or prize money) allowances

Question 29

is a price reduction given for used products when similar new products are bought

Answer 29

trade-in allowance

Question 30

refunds paid to customers after a purchase

Answer 30

rebates

Question 31

which means free on board some vehicle at some place

Answer 31

F.O.B.

Question 32

means making an average freight charge to all buyers within specific geographic areas

Answer 32

Zone pricing

Question 33

mean making an average freight charge to all buyers

Answer 33

Uniform delivered pricing

Question 34

means absorbing freight cost so that a firm's delivered price meets that of the nearest competitor

Answer 34

freight-absorbtion pricing

Question 35

means setting a fair price level for a marketing mix that really gives the target market superior customer value

Answer 35

Value pricing

Question 36

put a lower limit on prices, especially at the wholesaler and retail levels

Answer 36

unfair trade practice acts

Question 37

is pricing a product sold in a foreign market below the cost of producing it or at the price lower than in its domestic market

Answer 37

dumping

Question 38

prices customers are shown to suggest that the price has been discounted from list

Answer 38

Phony list price

Question 39

bans "unfair or deceptive acts in commerce

Answer 39

Wheeler Lea Amendment

Question 40

competitors getting together to raise, lower, or stabilize prices- is common and relative easy

Answer 40

price fixing

Question 41

make price discrimination illegal

Answer 41

Robinson-Patman act

Question 42

selling the same products to different buyers at different prices- if it injures competition

Answer 42

Price discrimination

Question 43

The price charged to customers multiplied by the number of units sold

Answer 43

Revenue

Question 44

Revenue minus expenses

Answer 44

Profit

Question 45

The buyer absorbs the freight costs from the shipping point(“free on board”).

Answer 45

FOB Origin | Pricing

Question 46

The seller pays the freight charges and bills the purchaser an identical, flat freight charge.

Answer 46

Uniform Delivered Pricing

Question 47

The U.S. is divided into zones, and a flat freight rate is charged to customers in a given zone.

Answer 47

Zone Pricing

Question 48

The seller pays for all or part of the freight charges and does not pass them on to the buyer.

Answer 48

Freight Absorption Pricing

Question 49

Laws that prohibit wholesalers and retailers from selling below cost

Answer 49

Unfair TradePractices Acts

Question 50

An agreement between 2 or more firms on the price they will charge for a product

Answer 50

Price | Fixing

Question 51

The practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market.

Answer 51

Predatory Pricing