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RMAR
ch15
| Question | Answer |
|---|---|
| price discrimination | occurs when a retailer charges different prices for identical products and/or services sold to different customers |
| predatory pricing | arises when a dominant retailer sets prices below its costs to drive competitive retailers out of business |
| horizontal price fixing | involves agreements between retailers that are in direct competition with each other to set the same prices |
| bait-and-switch | unlawful, deceptive practice that lures customers into a store by advertising a product at a lower-than-normal price (the bait) and then, once they are in the store, induces them to purchase a higher-priced model (the switch) |
| markup | difference between the retail price and the cost of an item |
| markup percentage | markup as a percentage of the retail price |
| reductions | factors that reduce there is a difference between the initial and the maintained markup |
| initial markup | retail selling price initially set for the merchandise, minus the cost of the merchandise |
| maintained markup | actual sales realized for the merchandise, minus its costs |
| merchandising optimization software | set of algorithms (computer programs) that monitors merchandise sales, promotions, competitors' actions, and other factors to determine the optimal (most profitable) price and timing for merchandising activities, especially markdowns |
| break-even analysis | determines, on the basis of a consideration of fixed and variable costs, how much merchandise needs to be sold to achieve a break even (zero) profit |
| break-even point quantity | quantity at which total revenue equals total cost, and then profit occurs for additional sales |
| fixed costs | costs that do not change with the quantity of product produced and sold |
| variable costs | the retailer's expenses that vary directly with the quantity of product produced and sold |
| markdowns | price reductions or discounts from the initial retail price |
| traffic appliances | small portable appliances |
| first-degree price discrimination | charging individual customer a different price based on their willingness to pay |
| second-degree price discrimination | offer the same multiple price schedule to all customers but require that customers do something to get the lower price--something that discourages customers with a high willingness to pay to take advantage of the lower price |
| coupons | offer a discount on the price of specific items when they're purchased |
| rebates | provide another form of discounts for consumers off the final selling price; however, in this case, the manufacturer, instead of the retailer, issues the refund as a portion of the purchase price returned to the buyer in the form of cash |
| price bundling | the practice of offering two or more different products or services for sale at one price |
| multiple-unit pricing (quantity discounts) | practice of offering two or more similar products or services for sale at one lower total price |
| third-degree price discrimination | retailers often charge different prices to different demographic market segments |
| zone pricing | practice of charging different prices in different stores, markets, regions, or zones |
| high/low pricing | discount the initial prices for merchandise through frequent sales promotions |
| everyday low pricing (EDLP) | emphasizes the continuity of retail prices at a level somewhere between the regular non-sales price and the deep-discount sale price of high/low retailers |
| low price guarantee policy | guarantees customers they will have the lowest price in a market for products they sale |
| rain checks | written promises given to customers when merchandise is out of stock to sell customers that merchandise at the sale price when the merchandise arrives |
| yield management | the practice of adjusting prices up or down in response to demand to control the sales generated |
| leader pricing | involves a retailer pricing certain items lower than normal to increase customers' traffic flow or boost sales of complementary products |
| loss leaders | complementary products |
| cherry pickers | shoppers who go from one store to another, buying only items that are on special |
| pricing lining | predetermined price points within a merchandise category |
| odd pricing | refers to the practice of using a price that ends in an odd number, typically a 9 |
Created by:
danicita3387
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