Chapter 10

Question 1

Price

Answer 1

Amount of money exchanged for a product or a service, or the sum of the values that customers exchange for the benefits of halving or using the product or service

Question 2

Customer Value Based Pricing

Answer 2

Setting price based on buyers perceptions of value rather than on the seller’s cost
- Price is considered along with the other marketing mix variables before the program is set

Question 3

Good-Value pricing

Answer 3

Offering just the right combination of quality and good service at a fair price
- Often less expensive versions of established brand name products

Question 4

Value-Added Pricing

Answer 4

Attaching value added features and services to differentiate a company’s offering and charging higher prices
- Ex, VIP theatres, adding more and charging more

Question 5

Cost-based pricing

Answer 5

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

Question 6

Cost-Plus Pricing

Answer 6

Adding a standard markup cost of the product

Question 7

Break Even Pricing

Answer 7

Setting price to break even on the costs of making and marketing the product, or selling a price to make a target return

Question 8

Competition Based Pricing

Answer 8

Setting Prices based on competitors strategies, prices, costs, and market offerings

Question 9

Target Costing

Answer 9

Pricing that starts with an ideal selling price, and then targets costs that will ensure that the price is met

Question 10

Market Skimming Pricing

Answer 10

Setting a high price for a new product ti skim maximum revenue layer by layer from the segments willing to pay the higher price

Question 11

Market Penetration Pricing

Answer 11

Setting a low initial 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

Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors prices

Question 13

Optional Product Pricing

Answer 13

Pricing of optional or additional products slog with a main product

Question 14

Captive-Product Pricing

Answer 14

Setting a price for products that must be used along with a main product

Question 15

By-Product Pricing

Answer 15

Setting a price for by-products to make the main products price more competitive

Question 16

Product Bundle Pricing

Answer 16

Combining several products and offering the bundle at a reduced rate

Question 17

Allowance

Answer 17

Promotional money paid by manufacturers to retailers in return for an agreement to feature their product in some way

Question 18

Segmented Pricing

Answer 18

Selling one product at more then one price, where prices are not based on costs

Question 19

Dynamic Pricing

Answer 19

Adjusting prices continually to meet characteristics and needs of individual consumers and situations