MKT Chapter 14

________-oriented pricing approaches weigh factors underlying expected customer tastes and preferences more heavily than other factors.

Demand

___________ -oriented approaches to pricing regard expected customer tastes and preferences as the most important factors in the decision.

Demand

Deceptive pricing is illegal under the ______.

Federal Trade Commission Act

A one-price policy means there is one price for ______.

all buyers of the product

Penetration, price lining, and bundle pricing are all types of what pricing approach?

demand-oriented

If a firm sells the same product to different buyers at different prices, it may be considered ________.

price discrimination

When a manufacturer produces several products that are substitutes for one another and others that complement these products, it should use ______.

product-line pricing

When using competition-oriented pricing approaches, price setters stress ______.

what "the market" is doing

________-oriented approaches to pricing set the price to reflect the way the marketer wants consumers to interpret prices relative to competitor's offerings.

Competition

What is a characteristic of bundle pricing?

Consumer value is enhanced by not having to make separate purchases.

________ are made by manufacturers to list prices to reflect the cost of transportation of the products from seller to buyer.

Geographical adjustments

________ pricing is seen as the exact opposite of skimming pricing when introducing a new product.

Penetration

How does a skimming pricing strategy approach price setting?

Prices are set high initially and then lowered in a series of steps.

Organizations can be most effective using skimming pricing under which two conditions?

The customer understands and highly values the product. The product is protected by patent.

Which is an example of deceptive pricing?

a bait and switch to lure customers into the store to sell them a higher priced product

Yield management pricing is ______.

a complex approach that continually matches demand and supply to customize the price for a service

Demand-oriented, cost-oriented, profit-oriented, and competition-oriented are four approaches used to set ______.

approximate price levels

The marketing of two or more products in a single package price is known as ________ pricing.

bundle

Common approaches to pricing are oriented around which four elements?

cost competition profit demand

Pricing approaches that consider the production and marketing costs and then add enough to cover direct expenses, overhead, and profit are ______ approaches.

cost-oriented

When using predatory pricing, a firm sets a very low price for one or more of its products in order to

drive its competition out of business

Select the three special adjustments that are often made to the list or quoted price.

geographical adjustments discounts allowances

Prestige pricing involves setting a _____ price for a product so that _____ consumers will be attracted to the product and buy it.

high; quality-conscious

In penetration pricing, the initial price of the product is set ______.

low, to appeal to the mass market

In target pricing, ______.

manufacturers deliberately adjust the composition of a product to achieve the estimated price that consumers are willing to pay for it.

Price deals that ________ fall into the category of deceptive pricing.

mislead consumers

In ________ pricing, an organization sets a price a few dollars or cents under an even number, such as at $3.99.

odd-even

Sears offers a Craftsman radial saw for $499.99 rather than $500, using a(n) ________ pricing approach.

odd-even

A ________ policy is also known as fixed pricing.

one-price

Organizations using ________ pricing set the initial price low for the introduction of the new product to appeal immediately to the mass market.

penetration

When using _________ pricing, a firm sets a very low price for one or more of its products with the specific intent to drive its competition out of business.

predatory

Proving the practice of ________ is difficult because it must be shown that there was an explicit attempt to destroy a competitor with the use of a low price.

predatory pricing

Marketers who use ______ to signal the quality of an item, must be careful not to drop the price of the product below the point where customers become skeptical of its quality and refuse to purchase it.

prestige pricing

Charging different prices to different buyers for goods of like grade and quality is known as ______.

price discrimination

The practice of colluding with other firms to set prices is called ______.

price fixing

When a line of products is priced at a number of different specific pricing points, the ______ strategy is being used.

price lining

When a marketing manager sets prices for all items in a product line, seeking to produce a profit for the entire line but not necessarily each product, it is known as ______.

product-line pricing

Cost-oriented approaches to pricing consider which three things in the setting of a product's price?

profit overhead production costs

By focusing on target profit pricing or target return pricing, a firm is using a ________ pricing approach.

profit-oriented

A price reduction offered to channel members for featuring the manufacturer's product in their advertising or selling activities is called a(n) _________ allowance.

promotional

Instead of offering a _____ allowance to retailers, some manufacturing companies like P&G have chosen to use an everyday low pricing (EDLP) strategy.

promotional

When a manufacturer offers a grocery retailer an extra amount of free product for including this product in weekly advertising and in-store sales, this is considered a ________ allowance.

promotional

Cumulative and noncumulative are the two general kinds of ______ discounts.

quantity

Reductions in unit costs for a larger order are known as ________ discounts.

quantity

Geographic adjustments to prices are used to ______.

reflect the cost of transportation of products from seller to buyer

A marketing manager uses price lining when he ______.

sells several groups of the same type of product, with each group priced at different specific pricing points

Price fixing is the conspiracy among firms to ______.

set prices for a product

For ________ pricing to be effective, there must be sufficient customers willing to buy the product at a high initial price, they should interpret the high price as signifying high quality, and the high price should not attract competition.

skimming

In what pricing strategy are prices lowered in a series of steps with the demand by those who really desire the product being satisfied at the highest prices?

skimming pricing

Which is an example of a demand-oriented approach to setting an approximate price?

skimming pricing

Discounts, allowances, and geographic adjustments are considered ________ that affect the list or quoted price.

special adjustments

In ________ pricing, an organization estimates what consumers are willing to pay for a product, and works backward, accounting for markups by retailers and wholesalers, to determine what it can charge for the product.

target

Which two are profit-oriented approaches to setting a price?

target profit pricing target return pricing

Bundle pricing refers to ______.

the marketing of two or more products in a single package price.

What is a marketer most likely trying to convey about a product if it is priced using prestige pricing?

the product is of high quality

Charging different prices for a product in order to maximize revenue for a set amount of capacity at any given time is known as ________ pricing.

yield management