Chapter 21

Question 1

Goals that describe what a firm wants to achieve through pricing

Answer 1

Pricing objectives

Question 2

Adding a dollar amount or percentage to the cost of the product

Answer 2

*cost-based pricing

Question 3

Adding a specified dollar amount or percentage to the seller’s cost

Answer 3

cost-plus pricing

Question 4

Adding to the cost of the product a predetermined percentage of that cost

Answer 4

*Markup pricing

Question 5

Pricing based on the level of demand for the product

Answer 5

demand-based pricing

Question 6

Pricing influenced primarily by competitors prices

Answer 6

competition-based pricing

Question 7

Charging different prices to different buyers for the same quality and quantity of product

Answer 7

differential pricing

Question 8

Establishing a final price through bargaining between seller and customer

Answer 8

negotiated pricing

Question 9

setting one price for the primary target and a different price for another market

Answer 9

Secondary-market price

Question 10

Temporary reduction of prices on a patterned or systematic basis

Answer 10

Periodic discounting

Question 11

Temporary reduction of prices on an unsystematic basis

Answer 11

random discounting

Question 12

Charging the highest possible price that buyers who most desire the product will pay

Answer 12

*Price skimming

Question 13

Setting prices below those of competing brands to penetrate a market and gain a significant marketshare quickly

Answer 13

Penetration pricing

Question 14

Establishing and adjusting prices of multiple products with a product line

Answer 14

Product-line pricing

Question 15

Pricing the basic product in a product line low, while pricing related items higher

Answer 15

*captive pricing

Question 16

Pricing the highest-quality or most versatile products higher than other models in the product line

Answer 16

premium pricing

Question 17

Pricing an item in a product line low with the intention of selling a higher priced item in the line

Answer 17

bait pricing

Question 18

Setting a limited number of prices for selected groups or lines of merchandise

Answer 18

price lining

Question 19

Pricing that attempts to influence a customer’s perception of price to make a products price more attractive

Answer 19

Psychological pricing

Question 20

Pricing a product at a moderate level and displaying it next to a more expensive model or brand

Answer 20

reference pricing

Question 21

Packaging together two or more complementary product and selling them at a single price

Answer 21

bundle pricing

Question 22

Packaging together two or more identical products and selling them at a single price

Answer 22

multiple-unit pricing

Question 23

Pricing products low on a consistent basis

Answer 23

everyday low prices (EDLP)

Question 24

Ending the price with certain number to influence buyer’s perceptions of the price or product

Answer 24

odd-even pricing

Question 25

Pricing on the basis of tradition

Answer 25

Customary pricing

Question 26

Setting prices at an artificially high level to convey prestige or a quality image

Answer 26

\*prestige pricing

Question 27

Fees set by people with great skill or experience in a particular field

Answer 27

\*Professional pricing

Question 28

Products priced near or even below cost

Answer 28

price leaders

Question 29

Advertised sales or price cutting linked to a holiday, a season, or an event

Answer 29

\*special event pricing

Question 30

Setting a price at a specific level and comparing it with a higher price

Answer 30

comparison discounting