Marketing CHAPTER 17

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

A base price schedule.

Which of the following would have a direct impact on dynamic pricing?

Current demand; and consumer type

Instead of competing on price, online retailers often pursue a competitive advantage over local retailers by offering which of the following?

Free shipping, greater selection, and excellent customer service

Which of the following pricing objectives are sales oriented?

Growth in market share, and dollar or unit sales growth

Which of the following pricing objectives are profit oriented?

Maximize profits and target return

What two policies do marketing managers typically choose between when deciding how to price their goods?

One-price policy; and Flexible price policy

Push money allowances are also known as ______ and _______ .

PMs; spiffs

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

Price

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

Robinson-Patman Act

Quantity discounts are designed to allow sellers to do which of the following?

Shift storage function to buyers; reduce shipping costs; get more business

Which of these companies is using a profit maximization objective?

Store charges the highest price customers will pay as it wants to make as much profit as possible

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

The competition; and the relevant target market

While the Robinson-Patman Act makes price discrimination illegal, it does allow some price differences based on which two of the following?

The need to meet competition; and cost differences

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

When a demand for a service increases, prices go up.

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

basic

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

big data

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

boards

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

borrowing

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

competition

In value pricing: important to clearly define relevant target market & __________ .

competitors

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

complaints from those charged more

When producers offer rebates, they ensure that the final discount goes directly to the _______ .

consumer

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

Cash discounts:

designed to encourage people to pay their bills quickly

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

differentiate its value

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

discount

An allowance is best described as a ________ .

discount

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

discount

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

discounts

Another term for status quo objectives is ______ objectives.

don't-rock-the-pricing-boat

If an invoice lists payment as being net 10 = payment is ________ .

due within 10 days

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

dynamic

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

Administered prices are set by ______ .

firms

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

flexible

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 ________ .

functional discounts

Trade discounts:

given to channel members in return for the job they do

Advertising allowances:

given to firms in the channel to encourage them to promote the supplier's products

Push money allowances:

given to retailers by manufacturers or wholesalers to pass onto salespeople for aggressively selling certain items

In the US, price fixing is considered _________ .

illegal

Companies with a long-run view aim for _____ market share when the market is growing.

increased

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

introductory price dealing

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 afford

Price-cutting can lead to _____.

lower profits

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

mature

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

more price-sensitive customers

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

net

When firms direct their marketing strategy on something other than price, they engage in ______ .

non-price competition

Sale prices:

offered temporarily to encourage immediate buying

Stocking allowances:

offered to intermediaries to convince them to give a product shelf space

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

one low price

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 firms expect strong competition soon after a product is launched, they are wise to employ ________ .

penetration pricing

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

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

price

The amount of money it costs to obtain some good, service, or other valuable thing is known as the _______ .

price

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

price discrimination

When competitors get together to raise, lower, or stabilize prices =

price fixing.

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 _______ .

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

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

push money

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

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

reducing its list price

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

sale 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

When firms want to encourage buyers to buy earlier than present demand requires, they offer _______ .

seasonal discounts

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

skimming

Stocking allowances are sometimes known as ______ allowances.

slotting

When current market share is satisfactory and managers are satisfied with their profits, they often set _______ .

status quo objectives

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

stocking

When a firm sets a desired profit level, it establishes a ______ objective.

target return

Unlike penetration pricing, introductory price dealing is ________ .

temporary

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

that others paid lower prices

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

the customer wants to buy

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

Cash discounts need to be evaluated closely.

true

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 are in more than half of the states in the US.

true

Legislative acts that put a lower limit on prices: known as _________ .

unfair trade practices

Quantity discounts:

used to encourage customers to buy in bulk

Seasonal discounts:

used to encourage people to buy earlier than present demand requires

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

value

Price is ______

what a customer must give up in order to receive the benefits offered by the rest of a firm's marketing mix.

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

with a credit card

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

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

administered prices

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

advertising

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

The benchmark price reflects the _____________ .

average price of all competitors in the market

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

economies of scale