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MKTG 425 > Pricing > Flashcards

Pricing Flashcards

1
Q

Price Elasticity Of Demand

A

the sensitivity of customers to price changes in terms of the quantities they will buy

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2
Q

Horizontal Price Fixing

A

an agreement among manufacturers, among wholesalers, or among retailers to set prices

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3
Q

Vertical Price Fixing

A

when manufacturers or wholesalers seek to control the retail prices of their goods and services

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4
Q

Robinson-Patman Act

A

bars manufacturers and wholesalers from discriminating in price or purchase terms in selling to individual retailers if these retailers are purchasing products of “like quality” and the effect of such discrimination is to injure competition

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5
Q

Minimum-Price Laws

A

laws that prevent retailers from selling certain items for less than their cost plus a fixed percentage to cover overhead

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6
Q

Predatory Pricing

A

large retailers seek to reduce competition by selling goods and services at very low prices, this causing small retailers to go out of business

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7
Q

Loss Leaders

A

retailers price selected items below cost to lure more customer traffic for those retailers

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8
Q

Unit Pricing

A

some retailers must express both the total price of an item and its price per unit of measure

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9
Q

Item Price Removal

A

prices are marked only on shelves or signs and no on individual items

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10
Q

Bait-And-Switch Advertising

A

illegal practice in which a retailer lures a customer by advertising goods and services at exceptionally low prices

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11
Q

Gray Market Goods

A

brand-name products bought in foreign markets or goods transshipped from other retailers

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12
Q

Market Penetration Pricing

A

a retailer seeks large revenues by setting low prices and selling many units

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13
Q

Market Skimming Pricing

A

a firm sets premium prices and attracts customers less concerned with price than service, assortment, and prestige

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14
Q

Demand-Oriented Pricing

A

a retailer sets prices based on consumer desires

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15
Q

Cost-Oriented Pricing

A

retailer sets a price floor

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16
Q

Competition-Oriented Pricing

A

retailer sets its prices in accordance with competitors’

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17
Q

Price-Quality Association

A

many consumers feel high prices connote high quality and low prices connote low quality

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18
Q

Prestige Pricing

A

assumes that consumers will not buy goods and services at prices deemed too low

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19
Q

Markup Pricing

A

retailer sets prices by adding per-unit merchandise costs, retail operating expenses, and desired profit

20
Q

Markup

A

difference between merchandise costs and selling price

21
Q

Markup Percentage

A

[% at retail = (retail selling price-merchandise cost )/(retail selling price ) ]
[% at cost = (retail selling price-merchandise cost)/(merchandise cost)]

22
Q

Initial Markup

A

based on original retail value assigned to merchandise less the costs of merchandise

23
Q

Maintained Markup

A

based on the actual prices received for merchandise sold during a time period less merchandise cost

24
Q

Gross Margin

A

difference between net sales and the total cost of goods sold

25
Q

Variable Markup Policy

A

retailer purposely adjusts markups by merchandise category

26
Q

Direct Product Profitability (DPP)

A

a technique that enables a retailer to find the profitability of each category of merchandise by computing adjusted per-unit gross margin and assigning direct product costs for such expense categories as warehousing, transportation, handling, and selling

27
Q

Customary Pricing

A

retailer sets prices for goods and services and seeks to maintain them for an extended period

28
Q

Everyday Low Pricing (EDLP)

A

a retailer strives to sell its goods and services at consistently low prices throughout the selling season

29
Q

Variable Pricing

A

a retailer alters its prices to coincide with fluctuations in costs or consumer demand

30
Q

Yield Management Pricing

A

computerized, demand-based, variable pricing technique, whereby a retailer determines the combination of prices that yield the greatest total revenues for a given period

31
Q

One-Price Policy

A

retailer charges the same price to all customers buying an item under similar conditions

32
Q

Flexible Pricing

A

lets consumers bargain over prices

33
Q

Contingency Pricing

A

a service retailer does not get paid until after the service is performed and payment is contingent on the service’s being satisfactory

34
Q

Odd Pricing

A

retail prices are set at levels below even dollar values, such as $0.49, $4.98, $199

35
Q

Leader Pricing

A

retailer advertises and sells selected items in its goods/service assortment at less than the usual profit margins

36
Q

Multiple-Unit Pricing

A

retailer offers discounts to customers who buy in quantity or wo buy a product bundle

37
Q

Bundled Pricing

A

retailer combines several elements in one basic price

38
Q

Unbundled Pricing

A

charge separate prices for each item sold

39
Q

Price Lining

A

sell merchandise at a limited range or price points with each representing a distinct level of quality

40
Q

Markdown

A

used to meet the lower price of another retailer

41
Q

Additional Markup

A

increases an item’s original price because demand in unexpectedly high or costs are rising

42
Q

Markdown Percentage

A

total dollar markdown as a percentage of net sales

Markdown percentage = (total dollar markdown)/(net sales (in $) )

43
Q

Off-Retail Markdown Percentage

A

looks at the markdown for each item or category of items as a percentage of original retail price

44
Q

Additional Markup Percentage

A

total dollar additional markups as a percentage of net sales

45
Q

Addition To Retail Percentage

A

measures a price rise as a percentage of the original price

MKTG 425 (6 decks)

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