Marketing - Chapter 14 (Test 3)
Predatory Pricing is illegal under which 2 acts?
Sherman Act & FTC
______ is setting the highest initial price that customers who really desire the product are willing to pay
Skimming Pricing
To encourage retailers to pay their bills quickly, manufacturers offer them _________
cash discounts
A firm that sets an annual target of a specific dollar volume of profit is using a _____ pricing approach
target profit
________ are reductions in unit costs for a larger order
Quantity Discounts
The Clayton Act as amended by the Robinson-Patman Act prohibits ___________ —the practice of charging different prices to different buyers for goods of like grade and quality
price discrimination
_____ pricing is the setting of prices for all items in a product line
product-line
High-volume products usually have ______ markups than low-volume products.
smaller
Functional reductions off the list or base price are offered to resellers in the marketing channel on the basis of __________ and __________
where they are in the channel and (2) the marketing activities they are expected to perform in the future
Bundle Pricing is an example of a _____ pricing approach
Demand
What is the purpose of loss-leader pricing?
Attract customers
Above-, At-, or Below-Market Pricing pricing is an example of a ____ pricing approach
Competition
Customary Pricing pricing is an example of a ____ pricing approach
Competition
Loss-Leader Pricing pricing is an example of a ____ pricing approach
Competition
Cost plus pricing is an example of a ____ pricing approach
Cost
Standard Markup pricing is an example of a ____ pricing approach
Cost
______ involves summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price.
Cost Plus pricing
_____ is the most commonly used method to set prices for business products
Cost-plus pricing
______ apply to the accumulation of purchases of a product over a given time period, typically a year
Cumulative
For some products where tradition, a standardized channel of distribution, or other competitive factors dictate the price, _____ pricing is used
Customary
Odd-Even Pricing is an example of a _____ pricing approach
Demand
Penetration pricing is an example of a ____ pricing approach
Demand
Prestige pricing is an example of a _____ pricing approach
Demand
Price Lining is an example of a _____ pricing approach
Demand
Skimming is an example of a _____ pricing approach
Demand
Yield Management pricing is an example of a _____ pricing approach
Demand
________ is the practice of replacing promotional allowances with lower manufacturer list prices
Everyday low pricing (EDLP)
Deceptive pricing is outlawed by the _______ Act.
Federal Trade Commission
A ____ price policy, also called a ____ price policy, is setting one price for all buyers of a product or service
Fixed, one
For a special promotion, retail stores deliberately sell a product below its customary price to attract attention to it, this is called ____ pricing
Loss Leader
During skimming, are customers sensitive to prices?
No.
______ quantity discounts are based on the size of an individual purchase order.
Noncumulative
_______ quantity discounts are based on the size of an individual purchase order. They encourage ____ individual purchase orders.
Noncumulative. Large
____ involves setting prices a few dollars or cents under an even number
Odd-Even Pricing
Many segments of the market are price sensitive, a low initial price discourages competitors from entering the market, and unit production and marketing costs fall dramatically as production volumes increase are the conditions favoring ____
Penetration Pricing
________ involves setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it
Prestige Pricing
A firm that is selling not just a single product but a line of products may price them at a number of different specific pricing points, which is called ______
Price lining
Target Return-on-Investment Pricing is an example of a _____ pricing approach
Profit
Target Return-on-Sales Pricing is an example of a _____ pricing approach
Profit
Target profit Pricing is an example of a _____ pricing approach
Profit
______ entails adding a fixed percentage to the cost of all items in a specific product class
Standard Markup pricing
_________ pricing approach sets typical prices that will give them a profit that is a specified percentage, say, 1 percent, of the sales volume
Target Return on Sales
What is the equation for Target Return on Sales?
Total Profit / Total Revenue
To reward wholesalers and retailers for marketing functions they will perform in the future, a manufacturer often gives _____, or _______, discounts.
Trade, functional
______ is the charging of different prices to maximize revenue for a set amount of capacity at any given time.
Yield Management Pricing
cost-plus ______ pricing means that a supplier is reimbursed for all costs, regardless of what they turn out to be, but is allowed only a fixed fee as profit that is independent of the final cost of the project
fixed-fee
Setting a low initial price on a new product to appeal immediately to the mass market is ______
penetration pricing
With cost-plus _______ pricing, a fixed percentage is added to the total unit cost
percentage-of-cost
To encourage buyers to stock inventory earlier than their normal demand would require, manufacturers often use _______ discounts
seasonal