Ch.10-13

Question 1

Price

Answer 1

the amount of money charged for a product or service, or the sum of all the values that customers exchange for the benefits of having or using the product or service.

Question 2

Value-based pricing

Answer 2

uses the buyers’ perceptions of value rather than the seller’s cost.
Value-based pricing is customer driven.
Cost-based pricing is product driven.
Price is set to match perceived value.

Question 3

Everyday low pricing (E D L P)

Answer 3

involves charging a constant everyday low price with few or no temporary price discounts

Question 4

High-low pricing

Answer 4

involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.

Question 5

Value-added pricing

Answer 5

attaches value-added features and services to differentiate a company’s offers and thus their higher prices.

Question 6

Cost-based pricing

Answer 6

sets prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.

Question 7

Fixed Cost

Answer 7

are the costs that do not vary with production or sales level.
Rent
Heat
Interest
Executive salaries

Question 8

Variable Cost

Answer 8

vary directly with the level of production.
Raw materials
Packaging

Question 9

Competition-Based Pricing

Answer 9

is setting prices based on competitors’ strategies, costs, prices, and market offerings.

Question 10

Marketing-Skimming Price

Answer 10

strategy sets high initial prices to “skim” revenue layers from the market.
Product quality and image must support the price.
Buyers must want the product at the price.

Question 11

Market-Penetration pricing

Answer 11

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

Question 12

Product line pricing

Answer 12

takes into account the cost differences between products in the line, customer evaluations of their features, and competitors’ prices.

Question 13

Optional product pricing

Answer 13

takes into account optional or accessory products along with the main product.

Question 14

Captive product pricing

Answer 14

sets prices of products that must be used along with the main product.

Question 15

By-product pricing

Answer 15

sets a price for by-products in order to make the main product’s price more competitive.

Question 16

Product bundle pricing

Answer 16

combines several products at a reduced price.

Question 17

psychological pricing

Answer 17

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

Question 18

reference pricing

Answer 18

are prices that buyers carry in their minds and refer to when they look at a given product.

Question 19

dynamic Pricing

Answer 19

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

Question 20

value delivery network

Answer 20

is composed of the company, suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system.

Question 21

upstream partners

Answer 21

are firms that supply raw materials,components, parts, information, finances, and expertise needed to create a product or service.

Question 22

Downstream partners

Answer 22

include the marketing channels or distribution channels that look toward the customer, including retailers and wholesalers.

Question 23

Channel level

Answer 23

is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.

Question 24

Direct marketing Channel

Answer 24

is a marketing channel that has no intermediary levels.

Question 25

Indirect marketing Channel

Answer 25

is a marketing channel containing one or more intermediary levels.

Question 26

Channel Conflict

Answer 26

refers to disagreement among channel members over goals, roles, and rewards.
Horizontal conflict
Vertical conflict

Question 27

Administered vertical marketing system

Answer 27

is a V M S that coordinates successive stages of production and distribution through the size and power of one of the parties.

Question 28

Horizontal marketing system

Answer 28

is a channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity.

Question 29

Marketing logisticts

Answer 29

involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet consumer requirements at a profit.

Question 30

Retailing

Answer 30

includes all the activities in selling products or services directly to final consumers for their personal, nonbusiness use.

Question 31

Retailers

Answer 31

are businesses whose sales come primarily from retailing.

Question 32

Shopper Marketing

Answer 32

focuses the entire marketing process on turning shoppers into buyers as they approach the point of sale, whether during in-store, online, or mobile shopping

Question 33

Omni-Channel Retailing

Answer 33

creates a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping, creating a single shopping experience

Question 34

Franchises

Answer 34

are contractual associations between a manufacturer, wholesaler, or service organization (a franchisor) and independent business people (franchisees) who buy the right to own and operate one or more units in the franchise system.

Question 35

Wholesaling

Answer 35

includes all activities involved in selling goods and services to those buying for resale or business use.

Question 36

Bokers and agents

Answer 36

do not take title, perform a few functions, and specialize by product line or customer type.
Brokers bring buyers and sellers together and assist in negotiations.
Agents represent buyers or sellers.