SB CHP 11: Pricing

Which of the following are pricing practices that are legally restricted?

-Price fixing -Price discrimination

What four factors must be taken into consideration to determine the "right" price for a product?

-Will enough money be made to pay for the development and production of the product? -Will the product provide a profit for the company? -Will it generate enough sales dollars to pay for the marketing of the product? -What are customers willing to pay for the product?

Common approaches to pricing are oriented around which four elements?

-demand -competition -profit -cost

Select all of the following that are common approaches to setting an approximate price level for a product.

-demand-oriented -cost-oriented -competition-oriented

Pricing objectives involves specifying the role of price in what two areas of an organization?

-its marketing plans -its strategic plans

Organizations choosing competitor-oriented approaches to set prices might use which two pricing strategies?

-loss-leader pricing -customary pricing

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

-production costs -overhead -profit

What two strategies can be used as part of a firm's profit objectives?

-target return -maximizing current profits

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

-target return pricing -target profit pricing

Break-even analysis analyzes the relationship between which two at various levels of output?

-total revenue -total cost

Match the following pricing issues that have legal implications to the correct description. 1. deceptive pricing 2. predatory pricing 3. price discrimination 4. price fixing

2. charging a very low price for a product with the intent of driving competitors out of business 3. charging different prices to different buyers for goods of like grade and quality 1. price deals that mislead consumers 4. conspiracy among firms to set prices

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

Competition

____ promises to reduce the average price to consumers while minimizing promotional allowances that cost manufacturers billions of dollars every year.

Everyday low pricing

Four approaches used to set ______ are oriented around demand, cost, profit, and competition.

approximate price levels

The practice of replacing promotional allowances with lower manufacturer list prices is known as ________ pricing.

everyday low

Walmart promotes that its average price for products will be lower than the competition. Walmart is able to offer low prices to its customers when its suppliers utilize ________, minimizing expensive promotional allowances.

everyday low pricing

___ cost is the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. (Enter one word in the blank)

fixed

Price fixing, price discrimination, and predatory pricing are ______.

legally prohibited

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

penetration

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

price discrimination

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

Price elasticity of demand is expressed as percentage change in ________ divided by the percentage change in _______

quantity demanded; price

A firm's goal in offering a trade discount is to _____.

reward wholesalers and retailers for marketing functions

Reductions off the list price offered to resellers in the marketing channel on the basis of where they are in the channel and the marketing activities they are expected to perform in the future are called ______ discounts.

trade