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Marketing Ch_19
Pricing Strategies
| Question | Answer |
|---|---|
| step out | significant changes in which one firm raises prices and then waits to see if others follow suit |
| Skimming pricing strategy | Pricing strategy involving the use of high price relative to competitive offerings |
| Market-plus Pricing | intentionally setting a relatively high price compared with the prices of competing products |
| Penetration Pricing Strategy | pricing strategy involving the use of a relatively low entry price |
| Market-minus pricing strategy | lower then market prices will attract buyers and move a brand from unknown newcomer to at least the brand-recognition |
| Everyday low pricing | a strategy devoted to continuous low prices as opposed to relying on short-term, price-cutting tactics such as cents-off coupons, rebates, and special sales |
| Competitive pricing strategy | Pricing strategy designed to deemphasize price as a competitive variable by pricing a good or service at the general level of comparable offerings |
| Opening price point | pricing a quality label product below the competition |
| List price | established price normally quoted to potential buyers |
| market price | the amount a consumer pays for a product |
| Cash discounts | reductions in price in exchange for prompt payment of bills |
| Trade discounts | payments to channel members for performing marketing functions |
| Quantity Discounts | price reductions granted for large-volume purchases |
| Cumulative quantity Discounts | reduce prices in an amount determined by purchases over stated time periods |
| Noncumulative Quantity Discounts | provide onetime reductions in the list price |
| Allowance | specified deduction from list price, including a trade-in or promotional allowance |
| Promotional allowances | reduce prices as part of attempts to integrate promotional strategies within distribution channels |
| Minimum advertised pricing | occurs when a manufacturer pays a retailer not to advertise a product below a certain price |
| rebate | a refund of a portion of the purchase price |
| Free on Board Plant | prices include no shipping charges. Buyer must pay all freight charges to transport |
| Free on Board Absorbed | These terms permit buyers to subtract transportation expenses from their bills |
| Uniform-delivered pricing | firm quotes the same price, including transportation costs to all buyers (postage stamp pricing) |
| Zone Pricing | modifies a uniform-delivered pricing system by dividing the overall market into different zones and establishing a single price within each zone |
| Basing Point Pricing | the price of a product includes the list price at the factory plus freight charges from the basing-point city nearest the buyer |
| Pricing Policy | is a general guideline that reflects marketing objectives and influences specific pricing decisions |
| Psychological Pricing | pricing policy based on the belief that certain prices of price ranges make a good or service more appealing than others to buyers |
| Odd pricing | marketers set prices at odd numbers just under round numbers |
| Unit Pricing | states prices in terms of some recognized unit of measurement (such as grams and liters) |
| Price Flexibility | whether or not to set one price that applies to every buyer or to permit cariable prices for different customers |
| Product-line Pricing | Practice of setting a limited number of prices for a selection of merchandise and marketing different product lines at each of these price levels |
| Promotional pricing | pricing policy which a lower-than normal price is used as a temporary ingredient in a firm's marketing strategy |
| Loss Leaders | goods are priced below cost to attract customers who, the retailer hopes, will also buy regularly priced merchandise |
| Leader Pricing | Variant of loss-leader pricing in which marketers offer prices slightly above cost to avoid violating minimum markup regulations and earn a minimal return on promotional sales |
| Competitive Bidding | inviting potential suppliers to quote prices on proposed purchases or contracts |
| Transfer Price | the price for moving goods between profit centers |
| Profit Centers | which are any part of the organization to which revenue and controllable costs can be assigned, such as a department |
| Cannibalization | loss of sales of an existing product due to competitive from a new product in the same line |
| Bundle pricing | offering two or more complementary products and selling them for a single price |
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