Chapter 14

Question 1

weigh factors underlying expected customer tastes and preferences more heavily than profit

Answer 1

demand-oriented pricing

Question 2

setting the highest initial price that customers really desiring the product are willing to pay when introducing a new product

Answer 2

skimming

Question 3

setting the lowest initial price on a product to appeal immediately

Answer 3

penetration pricing

Question 4

introduces a high price and keeps the high price

Answer 4

prestige pricing

Question 5

setting the price of a line of products at a number of different pricing points

Answer 5

price lining

Question 6

setting prices a few dollars or cents under an even number

Answer 6

odd-even pricing

Question 7

estimating the price that ultimate consumers would be willing to pay for a product

Answer 7

target pricing

Question 8

Marketing two or more products in a single package price

Answer 8

bundle pricing

Question 9

a price setter stresses the cost side of the pricing problem not the demand side

Answer 9

cost-oriented pricing

Question 10

Adding a fixed percentage to the cost of all items in a specific product class.

Answer 10

standard markup pricing

Question 11

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price.

Answer 11

cost-plus pricing

Question 12

pricing approach that involves
- target profit
- target return on sales
- target return on investment

Answer 12

profit-orientated pricing

Question 13

pricing approach that involves
- customary pricing
- above-, at-, or below-market
pricing
- loss leader

Answer 13

competition-orientated pricing

Question 14

setting a price by tradition or other competitive factors

Answer 14

customary pricing

Question 15

setting a market price for a product based on the competitor’s price

Answer 15

above, at, or below market pricing

Question 16

selling a product below its customary price to attract customer’s attention so they will buy large markup products

Answer 16

loss-leader pricing

Question 17

setting one price for all buyers of a product or service

Answer 17

fixed-price policy

Question 18

setting different price for products and services in real time responding to supply and demand

Answer 18

dynamic pricing policy

Question 19

Setting 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

Answer 19

product line pricing

Question 20

reductions from the list price that a seller gives a buyer as a reward for some favorable activity

Answer 20

discounts

Question 21

Reductions in unit costs for a larger order

Answer 21

quantity discounts

Question 22

buyers to stock inventory earlier than their normal demand would require

Answer 22

seasonal discounts

Question 23

to reward wholesalers and retailers for marketing functions they will perform in the future

Answer 23

trade discounts

Question 24

discounts that encourage retailers to pay their bills quickly

Answer 24

cash discounts

Question 25

reductions from list or quoted prices to buyers

Answer 25

allowances

Question 26

a price reduction given when a used product is accepted as part of the payment on a new product

Answer 26

trade-in allowances

Question 27

cash payments or an extra amount of “free goods” awarded sellers in the marketing channel for undertaking certain advertising or selling activities to promote a product

Answer 27

promotional allowances

Question 28

the practice of replacing promotional allowances with lower manufacturer list prices

Answer 28

everyday low pricing

Answer 29

price fixing