Chapter 14

Question 1

1. competition oriented approaches
2. cost oriented approaches
3. profit oriented approaches
4. demand oriented approaches
   what are these ?

Answer 1

the approaches for selecting an approximate price

Question 2

*customary
*above, at, or below market
*loss leader
which approximate price approach is this ?

Answer 2

competition oriented approaches

Question 3

*standard markup
*cost-plus
*experience curve
which approximate price approach is this ?

Answer 3

cost oriented approaches

Question 4

*target profit
*target return on sales
*target return on investment
which approximate price approach is this ?

Answer 4

profit oriented approaches

Question 5

*skimming
*penetration
*prestige
which approximate price approach is this ?

Answer 5

demand oriented pricing approach

Question 6

a pricing strategy that improves price realization by varying price by type of customer
what is this ?

Answer 6

price customization

Question 7

price customization that can change real time based on constantly updated data
what is this ?

Answer 7

dynamic pricing

Question 8

what are the 4 main factors that affect value and price customization ?

Answer 8

1. tastes
2. nature of use
3. intensity of use
4. competition

Question 9

setting the highest initial price that customers really desiring the product are willing to pay when introduce a new or innovative product
what is this ?

Answer 9

skimming pricing

Question 10

setting a low initial price on a new product to appeal immediately to the mass market
what is this ?

Answer 10

penetration pricing

Question 11

setting a high price so that quality or status conscious customers will be attracted to the product and buy it
what is this ?

Answer 11

prestige pricing

Question 12

setting the price of a line of product at a number of different specific pricing points
what is this ?

Answer 12

price lining

Question 13

setting prices a few dollars or cents under an even number
what is this ?

Answer 13

odd even pricing

Question 14

consists of (1) estimating price that ultimate consumers would be willing to pay for a product (2) working backward through markups take by retailers and wholesalers to determine what price to charge wholesalers, and then (3) deliberately adjusting the composition and features of the product to achieve the target price to consumers
what is this ?

Answer 14

target pricing

Question 15

marketing two or more products in a single package price
what is this ?

Answer 15

bundle pricing

Question 16

adding a fixed percentage to the cost of all items in a specific product class
what is this ?

Answer 16

standard markup pricing

Question 17

summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price
what is this ?

Answer 17

cost plus pricing

Question 18

setting an annual target of a specific dollar volume of profit
what is this ?

Answer 18

target profit pricing

Question 19

setting a price to achieve a profit that is specified percentage of sales volume
what is this ?

Answer 19

target return on sales pricing

Question 20

setting a price to achieve an annual target return on investment (ROI)
what is this ?

Answer 20

target return on investing pricing

Question 21

setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors
what is this ?

Answer 21

customary pricing

Question 22

setting a market price for a product or product class based on a subjective feel for the competitors price or market price as the benchmark
what is this ?

Answer 22

above, at, or below market pricing

Question 23

deliberately selling a product below its customary price, not to increase sales, but to attract customers attention to it in hopes that they will buy other products with large markups as well
what is this ?

Answer 23

loss leading pricing

Question 24

setting one price for all buyers of a product or service
what is this ?

Answer 24

fixed price policy

Question 25

setting different prices for products and services in real time in response to supply and demand conditions what is this ?

Answer 25

dynamic pricing policy

Question 26

setting prices for all items in a product to cover the total cost and produce a profit for the complete line, not necessarily for each item what is this ?

Answer 26

product line pricing

Question 27

reductions from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller what is this ?

Answer 27

discounts

Question 28

reductions in unit costs for a longer order what is this ?

Answer 28

quantity discounts

Question 29

to encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use ?

Answer 29

seasonal discounts

Question 30

to reward wholesalers and retailers for marketing functions they will perform in the future, a manufacturer often gives ?

Answer 30

trade or functional discounts

Question 31

to encourage retailer to pay their bills quickly manufacturers offer them ?

Answer 31

cash disocunts

Question 32

reductions from list or quoted prices to buyers for perfuming some activity what is this ?

Answer 32

allowances

Question 33

price reduction given when a used product is accepted as part of the payment on a new product what is this ?

Answer 33

trade in allowance

Question 34

cash payments or an extra amount of free goods awarded sellers in the marketing channel for undertaking certain advertising or selling activities to promote a product what is this ?

Answer 34

promotional allowances

Question 35

the practice of replacing promotional allowances with lower manufacturer list prices what is this ?

Answer 35

everyday low pricing

Question 36

price the seller quotes that includes only the cost of loading the product onto the vehicle and specific the name of ht location where the loading is to occur what is this ?

Answer 36

FOB origin pricing

Question 37

the price the seller quotes that includes all transportation costs what is this ?

Answer 37

uniform delivered pricing

Question 38

all buyers pay the same delivered price of the products regardless of their distance form the seller what is this ?

Answer 38

single zone pricing

Question 39

a firm divides its selling territory into geographical areas or zones what is this ?

Answer 39

multiple zone pricing

Question 40

selecting one or more geographical locations from which the list price for products plus freight expenses are charger to the buyer what is this ?

Answer 40

basing point pricing

Question 41

a conspiracy amount firms to set prices for a product what is this ?

Answer 41

price fixing

Question 42

charging different prices to different buyers for products of like grade and quality what is this ?

Answer 42

price discrimination

Question 43

price deals that mislead consumers fall into the category of ?

Answer 43

deceptive pricing

Question 44

charging a very low price for a product with the intent of driving competitors out of business what is this ?

Answer 44

predatory pricing

Question 45

who is responsible for the final price to customers ?

Answer 45

retailers