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MKTG 250 Chapter 14
| Question | Answer |
|---|---|
| Step 4 | select an approximate price level |
| Skimming Pricing | involves setting the highest initial price that customers who really desire the product are willing to pay when introducing a new or innovative product (D) |
| Penetration Pricing | involves setting a low initial price on a new product to appeal immediately to the mass market (D) |
| Prestige Pricing | involves setting a high price so that quality- or statusconscious consumers will be attracted to the product and buy it (D) |
| Price Lining | involves setting the price of a line of products at a number of different specific pricing points (D) |
| Odd-Even Pricing | involves setting prices a few dollars or cents under an even number (D) |
| Target Pricing | consists of (1) estimating the price that ultimate consumers would be willing to pay for a product, (2) working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers, and then (3) deliberately adjust |
| Bundle Pricing | involves the marketing of two or more products in a single package price (D) |
| Yield Management Pricing | involves the charging of different prices to maximize revenue for a set amount of capacity at any given time (D) |
| Standard Markup Pricing | involves adding a fixed percentage to the cost of all items in a specific product class ($) |
| Cost Plus Pricing | involves summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price ($) |
| Target Profit Pricing | involves setting an annual target of a specific dollar volume of profit (P) |
| Target Return-on-Sales Pricing | involves setting a price to achieve a profit that is a specified percentage of the sales volume (P) |
| Target Return-on-Investment Pricing | involves setting a price to achieve an annual target return on investment (ROI) (P) |
| Customary Pricing | involves setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors (C) |
| Above-, At-, Below-Market Pricing | involves setting a market price for a product or product class based on a subjective feel for the competitors’ price or market price as the benchmark (C) |
| Loss-Leader Pricing | involves deliberately selling a product below its customary price, not to increase sales, but to attract customers’ attention in hopes that they will buy other products with large markups as well (C) |
| Step 5 | set list or quoted price |
| Fixed Price Policy | One price for all buyers |
| Dynamic Pricing Policy | Flexible pricing in real time |
| Product Line Pricing | involves the setting of prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item |
| Price War | involves successive price cutting by competitors to increase or maintain their unit sales or market share |
| Step 6 | make special adjustments to list or quoted price |
| Quantity Discounts | eductions in unit costs for a larger order |
| Promotional Allowances | cash payments or extra amount of “free goods” awarded to sellers in the channel of distribution for undertaking certain advertising or selling activities to promote a product |
| Everyday Low Pricing | the practice of replacing promotional allowances with lower manufacturer list prices |
| Price Fixing | involves a conspiracy among firms to set prices for a product |
| Price Discrimination | the practice of charging different prices to different buyers for products of like grade and quality |
| Predatory Pricing | the practice of charging a very low price for a product with the intent of driving competitors out of business |
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