Chapter 17

Question 1

Target return objective:

Answer 1

a specific level of profit as an objective.

Question 2

Profit maximization objective:

Answer 2

an objective to get as much profit as possible.

Question 3

Sales‑oriented objective

Answer 3

: an objective to get some level of unit sales, dollar sales, or share of market‑‑without referring to profit.

Question 4

Status quo objectives:

Answer 4

“don’t-rock-the-pricing-boat” objectives

Question 5

Status quo objectives:

Answer 5

“don’t-rock-the-pricing-boat” objectives

Question 6

Status quo objectives:

Answer 6

“don’t-rock-the-pricing-boat” objectives

Question 7

Administered prices:

Answer 7

consciously set prices aimed at reaching the firm’s objectives.

Question 8

One‑price policy:

Answer 8

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

Question 9

Flexible‑price policy:

Answer 9

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

Question 10

Skimming price policy:

Answer 10

trying to sell the top of the market—the top of the demand curve—at a high price before aiming at more price-sensitive customers

Question 11

Skimming price policy:

Answer 11

trying to sell the top of the market—the top of the demand curve—at a high price before aiming at more price-sensitive customers

Question 12

Penetration pricing policy:

Answer 12

trying to sell the whole market at one low price.

Question 13

Introductory price dealing:

Answer 13

temporary price cuts to speed new products into a market.

Question 14

Discounts:

Answer 14

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

Question 15

Quantity discounts:

Answer 15

discounts offered to encourage customers to buy in larger amounts.

Question 16

Cumulative quantity discounts:

Answer 16

reductions in price for larger purchases over a given period, such as a year.

Question 17

Seasonal discounts:

Answer 17

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

Question 18

Noncumulative quantity discounts:

Answer 18

: reductions in price when a customer purchases a larger quantity on an individual order.

Question 19

Net:

Answer 19

an invoice term meaning that payment for the face value of the invoice is due immediately–also see cash discounts.

Question 20

Cash discounts:

Answer 20

reductions in the price to encourage buyers to pay their bills quickly.

Question 21

2/10, net 30:

Answer 21

allows a 2 percent discount off the face value of the invoice if the invoice is paid within 10 days.

Question 22

Trade (functional) discount:

Answer 22

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

Question 23

Sale price:

Answer 23

a temporary discount from the list price.

Question 24

Everyday low pricing:

Answer 24

setting a low list price rather than relying on frequent sales, discounts or allowance

Question 25

Allowances:

Answer 25

reductions in price given to final consumers, customers, or channel members for doing something or accepting less of something.

Question 26

Allowances:

Answer 26

reductions in price given to final consumers, customers, or channel members for doing something or accepting less of something.

Question 27

Advertising allowances:

Answer 27

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

Question 28

Stocking allowances:

Answer 28

allowances given to intermediaries to get shelf space for a product—sometimes called slotting allowances.

Question 29

Push money (or prize money) allowances:

Answer 29

allowances (sometimes called PMs or spiffs) given to retailers by manufacturers or wholesalers to pass on to the retailers' salesclerks for aggressively selling certain items.

Question 30

Trade‑in allowance:

Answer 30

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

Question 31

Rebates:

Answer 31

refunds to consumers after a purchase.

Question 32

F.O.B.:

Answer 32

a transportation term meaning free on board some vehicle at some point.

Question 33

Zone pricing:

Answer 33

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

Question 34

Uniform delivered pricing:

Answer 34

making an average freight charge to all buyers.

Question 35

Value pricing:

Answer 35

setting a fair price level for a marketing mix that really gives the target market superior customer value.Unfair trade practice acts: puts a lower limit on prices, especially at the wholesale and retail levels.

Question 36

Dumping:

Answer 36

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

Question 37

Wheeler Lea Amendment:

Answer 37

law that bans unfair or deceptive acts in commerce.

Question 38

Price fixing:

Answer 38

competitors illegally getting together to raise, lower, or stabilize prices.

Question 39

Robinson‑Patman Act:

Answer 39

a 1936 law that makes illegal any price discrimination if it injures competition.

Question 40

Price discrimination:

Answer 40

injuring competition by selling the same products to different buyers at different prices.