(Complete) Ch. 17: Pricing objectives and Policies

The prices that customers are typically charged for products are known as _____ list prices.

basic

Companies that participate in dumping practices, price a product in a foreign market _____ the cost of producing it.

below

Organizations have moved increasingly to flexible-price policies with the advent of ______.

big data

Instead of competing on price, online retailers often pursue a competitive advantage over local retailers by offering which of the following? (Check all that apply.)

-Excellent customer service -Free shipping -Greater selection

Which of the following statements is true of a one-price policy?

A one-price policy makes pricing easier.

Based on Exhibit 17-4, which of the following pricing objectives are sales oriented? (Check all that apply.)

Dollar or unit sales growth Growth in market share

_______ are refunds paid to consumers after a purchase.

Rebate

Push money, advertising allowances and other promotion aids that only apply to some customers would be considered violations of ______.

Robinson-Patman Act

The 1936 law that makes all price discrimination illegal is known as the ______.

Robinson-Patman Act

When credit card providers and retailers who offer credit make it too easy for adult consumers to buy products when their ability to repay is in question, ______ concerns may arise.

ethical

The selling of the same products to different buyers at different prices is considered price discrimination only if it ______.

injures competition

When Chinese firms allegedly sold steel in the United States for less than it could be produced in the United States, U.S. steel makers urged the U.S. government to ______.

pass anti dumping laws

When customers are shown prices that suggest a product's price is higher than what they are being asked to pay, they are being shown ______.

phony list prices

A price _____ is the percentage by which a price exceeds or falls short of a benchmark price.

premium

When stores offer a temporary discount from a product's list price, they sell it at a ______.

sale price

True or false: Retailers that accept credit cards pay the credit card company a percentage of the revenue from each credit sale for the service.

true

Unfair trade practice acts most often apply at the ______ and retail levels.

wholesale

Which of the following would have a direct impact on dynamic pricing? (Check all that apply.)

Consumer type Current demand

Price structures are most often built around which one of the following?

A base price schedule

One-price policies offer which of the following advantages? (Check all that apply.)

Customer satisfaction Administrative convenience

Setting a minimal list price rather than relying on sales is called ______.

Everyday low pricing

When marketing managers use sales too frequently, it can be an indication that he or she has failed to create ______.

a sustainable competitive advantage

When firms fail to take a cash discount, they are effectively ______ money.

borrowing

Reductions in price called ______ discounts are designed to encourage buyers to pay their bills quickly.

cash

Websites that reveal a firm's flexible pricing policies often receive ______.

complaints from those charged more

A reduction in the price of a product is called a _____.

discount

An allowance is best described as a(n) _____.

discount

Temporarily cutting a product's price in order to hasten new products into a market is known as ______.

introductory price dealing

When payment for the face value of an invoice is due immediately, the terms of the sale are considered _______.

net

Selling to the whole market at ______ is known as penetration pricing.

one low price

Connie's Coffees introduces a flavored coffee product at a high price and later lowers the price to capture more market share, the company is using a ______ pricing policy.

skimming

Firms that sell their products at a high price before lowering them for more price-sensitive customers are engaging in a _________ price policy.

skimming

Typically, if a buyer does not make payment until after a free-credit period has ended, the seller will ______.

add interest

Prices that are consciously set and not based on daily market forces are known as ______.

administered prices

Discounts that are offered to business customers, final consumers, or channel members in exchange for doing something or accepting less of something are known as ______.

allowances

Increasing market share helps firms reduce costs by improving their ______.

economies of scale

Price-cutting can lead to ______.

lower profits

Which of the following are examples of price in different settings? (Check all that apply.)

-Chase mortgage interest -Marriott hotel room rates -Southwest Airline fares

When a product or division fails to meet the target rate of return, companies will often do which of the following? (Check all that apply.)

-Drop the product -Eliminate the division -Sell the division to a competitor

Quantity discounts are designed to allow sellers to do which of the following? (Check all that apply.)

-Reduce shipping costs -Shift storage function to buyers -Get more business

Target return objectives are often expressed as which two of the following? (Check all that apply.)

A percentage of sales A percentage of capital investment

To encourage firms in the distribution channel to promote a supplier's products locally, price reductions called ___ allowances are given to the firms.

Advertising

True or false: Over the long term, marketing managers should usually pay more attention to sales than to profits.

False

Which of these companies is using a profit maximization objective?

Karl's Kleats charges the highest price the customer will pay in a order to make as much profit as possible

If Maria present s a(n) ________ when checking out at Kroger, she will receive a reduction on the list price of that item.

copoun

Unlike sales figures, profit figures take ________ into account.

costs

________ card sales offer convenience, easy access to online purchases and the ability to finance purchases over time.

credit

Marketing managers can develop loyalty with customers by offering _______ quantity discounts, which foster repeat buying.

cumulative

When firms offer variable pricing for the same quantities of the same product to different customers, they are said to have a ______ policy.

flexible-price

Another term for trade discounts is ________ discounts.

function

Companies with a long-run view aim for ______ (increased/decreased) market share when the market is growing.

increased

Unlike cumulative quantity discounts, noncumulative quantity discounts only apply to ______ orders.

individual

Firms must be careful because for each dollar of a price cut, that also means one dollar less in ______.

profit

Marketing managers should determine objectives that will lead to a ______.

profit

Managers who pursue sales growth rather than focusing on maximizing profits believe sales lead to ______.

profits

Suppliers offer advertising allowances to firms in exchange for ___.

promotion

Jose works at Sam's TV & Appliances store. Samsung has offered _____ to the store in order to encourage aggressive selling of their new televisions.

push money

Jamie purchased a new coffeemaker and received a form to fill out which she returned to the manufacturer along with proof of her purchase and two months later she received a $25 check in the mail. The check she received is an example of a(n) _____.

rebate

When suppliers want to see their products displayed prominently on store shelves, they offer retailers ______ allowances.

stocking

When a firm offers a list price reduction to channel members for the job they are going to do, they are offering what is known as a ______.

trade discount

When a customer returns a used product and purchases a similar new product, price reductions called ______ allowances are sometimes given.

trade-in

When a firm sets a price level by accounting for a marketing mix that promises to give the target market superior customer value, they are said to use ______ pricing.

value

What occurs in a "surge pricing" model in the service industry?

When demand for a service increases, prices go up

Which of the following statements about rebates are true? (Check all that apply.)

Many rebates are never redeemed. Rebates often motivate customers to make purchases.

Using Exhibit 17-4, which of the following pricing objectives are profit oriented? (Check all that apply.)

Maximize profits Target return

Phony list prices are designed to appeal to customers who look for ______ more than price.

discounts

True or false: Unfair trade practice acts are found in all 50 of the United States.

false

Value pricing focuses on ______. (Check all that apply.)

how the marketing mix meets customer needs customer requirements

A downward pressure on prices and profit margins exist in a _______ market.

mature

Selling the same products to different buyers at different prices, if it injures competition, is called ______.

price discrimination

A major timber exporting firm meets with competing timber exporters where they agree to not sell below certain prices. These exporting firms are engaging in

price fixing.

Discounts designed to compel customers to buy larger quantities of a certain product are known as ______.

quantity discounts

A(n) ______ is a refund paid by the producers to consumers after a purchase has been made.

rebate

Cellphones with unique new technology are usually released in the market at a high price since there is no immediate competition for the product. Gradually, the prices are reduced to capture more customers and to compete with competitors who copy the new technology. This type of pricing strategy is known as a _____ policy.

skimming price

Stocking allowances are also known as _______ allowances.

slotting

Meeting competition and nonprice competition are types of _____ pricing objectives.

status quo-oriented

Firms that engage in flexible pricing have to be careful that customers don't know ______.

that others paid lower prices

The most rapidly increasing method for distributing coupons is via ______.

the Internet

When purchasing items on sale, customers buy when the seller wants to sell instead of when ______.

the customer wants to buy

Firms based online have often pursued a strategy of increasing profits not by raising price but by increasing their ______ of sales.

volume

Sales prices should be use carefully and should reflect ______.

well-thought-out pricing objectives

The most common method consumers use to pay over time is _____.

with a credit card

True or false: Cash discounts need to be evaluated closely.

True

Administered prices are set by ______.

firms

When a firm sets a desired profit level, it establishes a(n) _______ return objective.

target

Discounts that apply to purchases over a certain period of time are known as ______.

cumulative quantity discounts

Marketers who determine value pricing focus on how the whole marketing mix meets ______.

customers' requirements

Manufacturers usually suggest a retail price. Retailers ______.

decide what to charge in their local markets

When little is known about the shape of the _______ curve, skimming can be an especially effective pricing strategy.

demand

When competitors are able to easily copy new ideas, it becomes difficult for a firm to ______.

differentiate its value

When an invoice is marked 2/10, net 30, the seller is allowing the buyer a(n) ______ if he or she pays within 10 days.

discount

When buyers give up some marketing function or provide the function themselves in exchange for a reduced list price, they receive a ______.

discount

Another term for status quo objectives is _____ objectives.

don't-rock-the-pricing-boat

If an invoice lists payment as being net 10, it means payment is ______.

due within 10 days

Firms that adjust prices rapidly as a result of changing demand and conditions are engaging in ______ pricing.

dynamic

Karina knows that Friday, Saturday and Sunday performances are more popular than weekday performances. So her theater charges more for weekend tickets. This is an example of ______ pricing.

dynamic

Over the course of a year, seasonal discounts tend to ______.

even out sales

Carrie likes to shop at her local discount retailer because it has a policy of always having the lowest list price on an item instead of relying on putting items on sale at various times. What kind of pricing policy does this store use?

everyday low pricing

True or false: Place is what a customer must give up in order to receive the benefits offered by the rest of a firm's marketing mix.

false

True or false: Value pricing emphasizes cheap prices at all costs, even if that means low-grade products or services.

false

The "surge pricing" model used by Uber is an example of _____ pricing.

flexible

In the United States, price fixing is considered _____.

illegal

Firms that aim to charge as much as their customers will pay desire to earn a rapid return on ______.

investment

The Robinson-Patman Act allows a business to use push money but only when _____.

it is available to all customers on a proportionately equal basis

One of the ethical concerns about credit card companies is that ______.

it makes it easy for people to buy things they really can't affordV

When multiple firms copy or improve on a product developed by another firm, the product typically becomes ______.

less expensive

To encourage retailers' salesclerks to aggressively sell certain items, manufacturers or wholesalers may give retailers ______ allowances.

push-money

As a result of ______, fewer U.S. firms are adhering to a one-price policy.

technology

Unlike penetration pricing, introductory price dealing is ______.

temporary

Push money allowances are typically used for which of the following? (Check all that apply.)

Slower-moving items New items Higher-margin items

Push money allowances are also known as which two of the following? (Check all that apply.)

Spiffs PMs

What two things must be clearly defined when making price decisions and using value pricing?

-relevant target market -the competition

The Wheeler-Lea Act does which of the following?

Bans unfair or deceptive acts in commerce

Which of these companies is using dynamic pricing?

Charles knows that weekend games are more popular for the hockey team he works for, so he charges higher prices for those tickets.

While the Robinson-Patman Act makes price discrimination illegal, it does allow some price differences based on which two of the following? (Check all that apply.)

Cost differences The need to meet competition

Which of the following statements about introductory price dealing is accurate?

It is used to speed a new product into the market.

What two policies do marketing managers typically choose between when deciding how to price their goods? (Check all that apply.)

One-price policy Flexible-price policy

The amount of money that is charged for "something" of value, or _____, is one of the four major strategy decision variables that a marketing manager controls.

Price

The tuition that Jane pays to attend her local community college is an example of which part of the marketing mix?

Price

True or false: Although it might be expected, the profit maximization objective does not necessarily mean the use of high prices.

True

True or false: In order to avoid price wars, firms sometimes adjust their prices only when firms that offer similar products or services do the same.

True Reason: When firms make price changes carefully and only if others follow their lead, it can help prevent a price war.

The FTC provision that bans "unfair or deceptive acts in commerce" is called the ______.

Wheeler Lea Act

According to a recent Supreme Court ruling involving Leegin's handbags and Kay's Kloset, when manufacturers impose a minimum price for their goods, they are ______.

acting in a legal manner

When there is too little _______, state governments have the power, in certain industries, to control prices.

competition

During the holiday season, some retail stores allow customers to select the items they wish to purchase and then make small weekly payments on those items. Once the entire purchase price has been met, the customers receive the items. These small weekly payments are an example of _____.

an installment plan

The benchmark price reflects the _____.

average price of all competitors in the market

In an effort to maintain competition, state governments often establish ______ to regulate pricing.

boards

In using value pricing, it is important to clearly define the relevant target market and the _______.

competition

While a skimming price policy involves first trying to sell when prices are at or near their peak, firms will subsequently aim to sell to ______.

more price-sensitive consumers

Cash discounts usually include provisions to modify the ______ of a sale.

net terms

Discounts that encourage larger orders without requiring future purchases are known as ______.

noncumulative quantity discounts

When firms set a single price for all customers, regardless of how much they buy or under what conditions they make their purchase, the firm is operating under a ______.

one-price policy

When a firm seeks to sell the entire market at one low price, they adopt a ______.

penetration price policy

In addition to place, promotion, and product, marketing managers also must make major strategy decisions about _____.

price

When competitors get together to raise, lower, or stabilize prices, it is called ______.

price fixing

Marketing managers can use trade-in allowances to lower the effective price of a product without ______.

reducing its list price

When a firm's managers set a(n) ______ objective, they describe their goals in terms of sales or market share rather than in terms of profit.

sales-oriented

Jake's Heating Company doesn't get much business in the summer months, so it offers lower prices on it's furnace cleaning service at that time to attract more customers. These lower prices are an example of a ______.

seasonal discount