ch15
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each of the black spaces below before clicking
on it to display the answer.
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| price discrimination | occurs when a retailer charges different prices for identical products and/or services sold to different customers
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| predatory pricing | arises when a dominant retailer sets prices below its costs to drive competitive retailers out of business
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| horizontal price fixing | involves agreements between retailers that are in direct competition with each other to set the same prices
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| 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)
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| markup | difference between the retail price and the cost of an item
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| markup percentage | markup as a percentage of the retail price
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| reductions | factors that reduce there is a difference between the initial and the maintained markup
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| initial markup | retail selling price initially set for the merchandise, minus the cost of the merchandise
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| maintained markup | actual sales realized for the merchandise, minus its costs
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| 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
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| 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
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| break-even point quantity | quantity at which total revenue equals total cost, and then profit occurs for additional sales
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| fixed costs | costs that do not change with the quantity of product produced and sold
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| variable costs | the retailer's expenses that vary directly with the quantity of product produced and sold
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| markdowns | price reductions or discounts from the initial retail price
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| traffic appliances | small portable appliances
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| first-degree price discrimination | charging individual customer a different price based on their willingness to pay
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| 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
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| coupons | offer a discount on the price of specific items when they're purchased
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| 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
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| price bundling | the practice of offering two or more different products or services for sale at one price
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| multiple-unit pricing (quantity discounts) | practice of offering two or more similar products or services for sale at one lower total price
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| third-degree price discrimination | retailers often charge different prices to different demographic market segments
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| zone pricing | practice of charging different prices in different stores, markets, regions, or zones
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| high/low pricing | discount the initial prices for merchandise through frequent sales promotions
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| 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
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| low price guarantee policy | guarantees customers they will have the lowest price in a market for products they sale
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| 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
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| yield management | the practice of adjusting prices up or down in response to demand to control the sales generated
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| leader pricing | involves a retailer pricing certain items lower than normal to increase customers' traffic flow or boost sales of complementary products
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| loss leaders | complementary products
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| cherry pickers | shoppers who go from one store to another, buying only items that are on special
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| pricing lining | predetermined price points within a merchandise category
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| odd pricing | refers to the practice of using a price that ends in an odd number, typically a 9
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