Ch 11

Which of the following describes cost inflation?

A situation in which rising costs squeeze profit margins and lead companies to pass cost increases along to customers

Which term refers to promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way?

Allowance

__________ is setting a price for by-products in order to make the main product's price more competitive.

By-product pricing

Which of the following describes product bundle pricing?

Combining several products and offering the bundle at a reduced price

__________ is adjusting prices continually to meet the characteristics and needs of individual customers and situations.

Dynamic pricing

__________ is a pricing strategy in which goods are placed free on board a carrier; the customer pays the freight from the factory to the destination.

FOB-origin pricing

__________ is setting prices for customers located in different parts of the country or world.

Geographical pricing

__________ is setting a price for a new product in order to attract a large number of buyers and large market share.

Market-penetration pricing

__________ is setting a price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales.

Market-skimming pricing

Which of the following describes deceptive pricing?

Occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers

__________ is the pricing of optional or accessory products along with a main product.

Optional-product pricing

__________ is setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices.

Product line pricing

__________ is pricing that considers the psychology of prices and not simply the economics; the price is used to say something about the product.

Psychological pricing

What is segmented pricing?

Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs

__________ is a geographical pricing strategy in which the company sets up two or more designated areas.

Zone pricing

Uniform-delivered pricing is __________.

a geographical pricing strategy in which the company charges the same price plus freight to all customers, regardless of their location

Basing-point pricing is __________.

a geographical pricing strategy in which the seller designates some city as a basing point and charges all customers the freight cost from that city to the customer

A discount is best defined as __________.

a straight reduction in price on purchases during a stated period of time or in larger quantities

Setting a price for products that must be used along with a main product, such as blades for a razor and games for a video-game console, is __________ pricing.

captive-product

Promotional pricing is __________.

temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales