PRICE PROMOTIONS

Question 1

__ __ are discounts, coupons, trial offers, trade deals, rebates, and other tactics used to temporarily lower prices.

Answer 1

PRICE PROMOTIONS

Question 2

4 POSITIVE EFFECT OF PRICE PROMOTIONS

Answer 2

INCREASED SALES
PRICE SEGMENTATION
BRAND EXPOSURE
HIGHER BASE PRICE

Question 3

Promotions encourage new customers to buy and can boost market share.

Answer 3

INCREASED SALES

Question 4

They allow businesses to charge different prices to different customers based on willingness to pay.

Answer 4

PRICE SEENTATION

Question 5

They can lead to brand switching, attracting new loyal customers.

Answer 5

BRAND EXPOSURE

Question 7

Well-executed promotions can justify higher non-promotional prices

Answer 7

HIGHER BASE PRICES

Question 8

18 NEGATIVE EFFECTS OF PRICE PROMOTIONS

Answer 8

IMPERFECT SEGMENTATION HEDGE
CUSTOMER CHUR
REFERENCE PRICE EFFECT
MARKET SIZE AND SHARE
LOSS OF PRICE CREDIBILITY
INCREASED OF PRICE SENSITIVITY
MANAGING VAGUENESS
PRICE PROMOTION DESIGN
TARGETED
TEMPORARY
TRIAL OFFERS
REBATES
SPECIAL
IRREGULAR
PROMOTIONAL BUNDLES
NEWSPAPER VERSUS IN-STORE COUPONS
MAIL-INS VERSUS INSTANT REBATES
HI-LO AND EDLP

Question 9

Although they can induce some customers who would not otherwise buy to do so, they also can provide unnecessary price concessions to otherwise loyal customers.

Answer 9

IMPERFECT SEGMENTATION HEDGE

Question 10

As noted, price promotions can encourage brand switching. While encouraging brand tral will improve sales during the price promotion, one of the key metrics of the long-term success of a price promotion is the ability of the product to capture brand-loyal customers during regular price times.

Answer 10

REFERENCE PRICE EFFECT

Question 11

Though price promotions as a part of a price segmentation policy can lead to higher “regular” prices during non-promotional periods, many marketing executives find that raisins

Answer 11

REFERENCE PRICE EFFECT

Question 12

During a price promotion, sales can increase substantially. For the manufacturer, increased sales come from two different sources: market size increases and brand switching.’

Answer 12

MARKET SIZE AND SHARE

Question 13

One way of speaking about the negative effect of price promotions on regular prices is the concept of losing price credibility

Answer 13

LOSS OF PRICE CREDIBILITY

Question 14

Perhaps the largest long-term challenge of price promotions derives from their focus on price itself.

Answer 14

INCREASE OF PRICE SENSITIVITY

Question 15

At issue in price promotion with relationship to price credibility and pricing power is a challenge of vagueness.

Answer 15

MANAGING VAUGNESS

Question 16

In addition to the quantitative guidelines provided through a profit sensitivity analysis. Managers can rely on four general qualitative rules to price promotions: Make them targeted. Make them temporary. Make them special. Make them irregular.

Answer 16

PRICE PROMOTION DESIGN

Question 17

four general qualitative rules to price promotions

Answer 17

TARGETED
TEMPORARY
SPECIAL
IRREGULAR

Question 18

This price promotions are discounts aimed at specific groups of customers to encourage purchases they might not make at full price.

Answer 18

TARGETED

Question 19

Price promotions should be temporary to boost immediate sales. If they last too long, they lose their effectiveness and become a new regular price.

Answer 19

TEMPORARY

Question 20

It encourage product sampling through free samples, smaller packages at lower prices, or discounted services, making it easy for customers to try products.

Answer 20

TRIAL OFFERS

Question 21

It provides a monetary incentive to purchase, like other forms of price promotion.

Answer 21

REBATES

Question 22

When possible, price promotions should be positioned as special, such as related to a unique event or a reward to specific customer groups.

Answer 22

SPECIAL

Question 23

In keeping with the desire to avoid resetting price expectations, some manufacturers have turned to using irregular price promotions.

Answer 23

IRREGULAR

Question 24

is the sale of two or more distinct products in a single transaction and at a single price.

Answer 24

PROMOTIONAL BUNDLES

Question 25

Guided by redemption rates and improved sales volumes alone, many marketing manager may be led to believe that in-store coupons are more efficient than those distributed by newspaper, direct mail, or other means to customers.

Answer 25

NEWSPAPER VERSUS IN-STORE COUPONS

Question 26

It differ widely on their redemption rates and targeting efficiency.

Answer 26

MAIL-IN VERSUS INSTANT REBATES

Question 27

formats where coupons and price promotions are used frequently to drive sales, tend to cycle prices on specific products between high "regular" levels and low "sales" levels.

Answer 27

HI-LO

Question 28

formats eschew price promotions in favor of holding ingoude prices at a consistently low level.

Answer 28

EDLP