Exam 3 (ch. 9 & 10)

Question 1

High initial prices to skim revenues layer by layer from the market

Answer 1

Market-Skimming Price

Question 2

Low initial price to penetrate the market

Answer 2

Market-Penetration Pricing

Question 3

A form of pricing in which consumers are charged both an entry fee (fixed price) and a usage fee (per-unit price)

Answer 3

Two-part pricing

Question 4

Any pricing method that uses consumer demand–based on perceived value–as the central element (difficult to estimate demand)

Answer 4

Demand based pricing (same as customer based pricing)

Question 5

Reducing prices to reward customer responses such as paying early or promoting a product

Answer 5

Discounts/Allowances

Question 6

Company sells product or service at two or more prices despite the prices not being based on costs

Answer 6

Segmented Pricing

Question 7

Sellers consider psychology of prices and not simply economics
- Higher prices indicate a higher quality
- Reference prices

Answer 7

Psychological Pricing

Question 8

prices buyers carry in mind when looking at a given product

Answer 8

Reference Prices

Question 9

What are the two pricing types

Answer 9

• two-part pricing
• demand based pricing (consumer based pricing)

Question 10

estimating a competitive price and designing a product to meet the price

Answer 10

target costing/pricing

Question 11

what are the four market types

Answer 11

• pure competition
• monopolistic competition
• oligopolistic competition
• pure monopoly

Question 12

many buyers and sellers with uniform products

Answer 12

Pure competition

Question 13

Numerous buyers and sellers with range of prices

Answer 13

Monopolistic competition

Question 14

few sellers that are highly sensitive to each other’s prices

Answer 14

Oligopolistic competition

Question 15

one seller dominates the market

Answer 15

Pure monopoly

Question 16

what kind of price adjustment reduces prices to create buying excitement and urgency (ex. Black Friday)

Answer 16

promotional

Question 17

what kind of price adjustment adjusts based on geographical location of customers

Answer 17

geographical

Question 18

what kind of price adjustment remains as one price for all buyers everywhere

Answer 18

fixed price

Question 19

what kind of price adjustment involves adjusting prices continually to meet the characteristics and needs of individual customers and situations (online shopping, fluid pricing for different consumers)

Answer 19

dynamic pricing

Question 20

what kind of price adjustment involves adjusting prices for international markets

Answer 20

international pricing

Question 21

what are the five product mix pricing options

Answer 21

• product line pricing
• optional-product pricing
• captive-product pricing
• by-product pricing
• product bundling pricing

Question 22

the product mix pricing type where management analyzes costs within a product line and sets price. pricing is based on product features

Answer 22

product line pricing

Question 23

the product mix pricing type that offers optional or accessory items along with main items

Answer 23

optional-product pricing

Question 24

the product mix pricing type that involves products that must be used along with the main product (ex. ink & printers, video games & game consoles)

Answer 24

captive-product pricing

Question 25

the product mix pricing type that finds a market to get rid of by-products and lower cost

Answer 25

by-product pricing

Question 26

the product mix pricing type that puts products together and selling the bundle at a reduced price

Answer 26

product bundling pricing

Question 27

when the price goes up or down the consumers' buying habits change

Answer 27

price elastic

Question 28

when the price goes up the consumers' buying habits stay the same and when the price goes down consumers' buying habits also remain unchanged

Answer 28

price inelastic

Question 29

what does a marketing channel consist of

Answer 29

the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption

Question 30

what is a marketing channel

Answer 30

it's the way products get to the end-user, the consumer; and is also known as a distribution channel.

Question 31

what are the two channel levels

Answer 31

- direct channels - indirect channels

Question 32

which channel level involves customers who buy goods directly from the manufacturer

Answer 32

direct channels

Question 33

which channel level moves the product through other distribution channels to get to the consumer

Answer 33

indirect channels

Question 34

when it comes to channel levels, the number of intermediaries is...

Answer 34

...the length of the channel

Question 35

As more channel levels are added...

Answer 35

...producers lose more control and face greater channel complexity

Question 36

occurs when channel members disagree on roles, activities, or rewards

Answer 36

channel conflict

Question 37

what are the two types of channel conflict

Answer 37

- horizontal conflict - vertical conflict

Question 38

what type of channel conflict occurs among firms at the same channel level

Answer 38

horizontal conflict

Question 39

what type of channel conflict occurs between different levels of the same channel

Answer 39

vertical conflict

Question 40

a channel structure where producers, wholesalers, and retailers act as a unified system

Answer 40

VMS (vertical marketing system)

Question 41

one member of the distribution channel owns the other members

Answer 41

corporate

Question 42

one member fo the channel is large and powerful enough to coordinate the activities of the other members without an ownership stake

Answer 42

administered VMS

Question 43

independent firms joining together via a contract

Answer 43

contractual VMS

Question 44

what are the three types of contractual VMS

Answer 44

- manufactured-sponsored retailer franchise system - manufacturer-sponsored wholesaler franchise system - service-firm-sponsored retailer franchise system

Question 45

what type of contractual VMS involves parent companies sponsoring their independent franchise dealers

Answer 45

manufactured-sponsored retailer franchise system

Question 46

what type of contractual VMS involves parent company licenses wholesalers to buy raw material and then turn it into a product (ex. bottlers)

Answer 46

manufacturer-sponsored wholesaler franchise system

Question 47

what type of contractual VMS is a system of service product delivery in which an organization producing a service sets up a number of independently-owned franchised outlets in locations convenient to its customers. (ex. McDonalds restaurant franchise)

Answer 47

service-firm-sponsored retailer franchise system

Question 48

single firm sets up two or more marketing channels to reach one or more customer segments. expands sales, market coverage, tailor products to diverse customer needs. harder to control, can generate conflict

Answer 48

multichannel distribution system (AKA hybrid marketing channels)

Question 49

cutting out marketing channel intermediaries. new types of channel intermediaries displace traditional ones.

Answer 49

disintermediation

Question 50

stocking the product in as many outlet as possible

Answer 50

intensive distribution

Question 51

giving a limited number of dealers the exclusive right to distribute the company's products

Answer 51

exclusive distribution

Question 52

the use of more than one but less than all of the intermediaries who are willing to carry the company's product

Answer 52

selective distribution

Question 53

channel of distribution facilitates breaking bulk. a customer can purchase one item instead of the 100 pack the retailer purchased

Answer 53

breaking bulk

Question 54

a type of supply chain management that moves goods from customers back to the seller's or manufacturers (ex. recycling technological components)

Answer 54

reverse logistics

Question 55

a form of retail business wherein the seller accepts customer orders but does not keep goods sold in stock. (take title but never possession)

Answer 55

drop shipper

Question 56

products that are sold legally, but outside of the brand's permission

Answer 56

gray market