M10

Question 1

is the amount of money that is charged for “something” of value.

Answer 1

PRICE

Question 2

sets a specific level of profit as an objective. Often this amount is stated as a percentage of sales or of capital investment.

Answer 2

TARGET RETURNED OBJECTIVES

Question 3

seeks to get as much profit as possible.

Answer 3

PROFIT MAXIMIZATION OBJECTIVE

Question 4

KEY PRICING POLICIES

Answer 4

Price Flexibility
Price-Levels Over Product Life Cycle
Transportation Costs
Discounts and Allowances

Question 5

means offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities

Answer 5

ONE-PRICE POLICY

Question 6

The same for everyone
Frequently purchased items
Convenient
Low cost
Maintains goodwill

Answer 6

ONE-PRICE POLICY

Question 7

means offering the same product and quantities to different customers at different prices.

Answer 7

FLEXIBLE PRICE POLICY

Question 8

Different customers, different prices
Databases make it easier
Salespeople can adjust prices
Too much cutting can hurt profits

Answer 8

FLEXIBLE-PRICE POLICY

Question 9

offers products at a price that changes according to the level of demand, the type of customer, or the state of the weather.

Answer 9

DYNAMIC PRICING

Question 10

Big data can be used to more accurately predict future demand and adapt prices to maximize revenue and profit. So for example, airlines typically adjust prices over time.

Answer 10

DYNAMIC PRICING

Question 11

tries to sell the top (skim the cream) of a market the top of the demand curve at a high price before aiming at more price-sensitive customers.

Answer 11

SKIMMING PRICE POLICY

Question 12

may maximize profits in the market introduction stage for an innovation, especially if there are few substitutes or if some customers are not price sensitive.

Answer 12

SKIMMING

Question 13

useful when you don’t know very much about the shape of the demand curve.

Answer 13

SKIMMING

Question 14

tries to sell the whole market at one low price. This approach might be wise when the elite market those willing to pay a high price are small.

Answer 14

PENETRATION PRICING POLICY

Question 15

Most price structures are built around a base price schedule or list price.

Answer 15

DISCOUNT POLICIES

Question 16

TYPES OF DISCOUNTS

Answer 16

• QUANTITY
• SALE
• CASH
• SEASONAL
• TRADE`

Question 17

are the prices final customers or users are normally asked to pay for products

Answer 17

BASIC LIST PRICE

Question 18

are reductions from list price given by a seller to buyers who either give up some marketing function or provide the function themselves

Answer 18

DISCOUNTS

Question 19

are discounts offered to encourage customers to buy in larger amounts.

Answer 19

QUANTITY DISCOUNTSA

Question 20

This lets a seller get more of a buyer’s business, or shifts some of the storing function to the buyer, or reduces shipping and selling costs or all of these.

Answer 20

QUANTITY DISCOUNTS

Question 21

TWO TYPES OF QUANTITY DISCOUNTS

Answer 21

• CUMULATIVE
• NONCUMULATIVE

Question 22

apply to purchases over a given period such as a year and the discount usually increases as the amount purchased increases.

Answer 22

CUMULATIVE QUANTITY DISCOUNTS

Question 23

encourage repeat buying by reducing the customer’s cost for additional purchases. This is a way to develop loyalty and ongoing relationships with customers.

Answer 23

CUMULATIVE DISCOUNTS

Question 24

apply only to individual orders. Such discounts encourage larger orders but do not tie a buyer to the seller after that one purchase.

Answer 24

NONCUMULATIVE DISCOUNTS

Question 25

are discounts offered to encourage buyers to buy earlier than present demand requires

Answer 25

SEASONAL DISCOUNTS

Question 26

are reductions in price to encourage buyers to pay their bills quickly.

Answer 26

CASH DISCOUNTS

Question 27

is a list price reduction given to channel members for the job they are going to do

Answer 27

TRADE DISCOUNTS

Question 28

is a temporary discount from the list price.

Answer 28

SALE PRICE DISCOUNTS

Question 29

means setting a fair price level for a marketing mix that really gives the target market superior customer value.

Answer 29

VALUE PRICING

Question 30

doesn’t necessarily mean cheap if cheap means bare-bones or low grade. It doesn’t mean high prestige either if the prestige is not accompanied by the right quality goods and services.

Answer 30

VALUE PRICING

Question 31

try to give the customer pleasant surprises because they increase value and build customer loyalty

Answer 31

VALUE PRICERS

Question 32

define the target market and the competition.

Answer 32

VALUE PRICERS

Question 33

fits with strategy planning.

Answer 33

VALUE PRICING