Quiz 6 Flashcards
Strategy planning for Price is concerned with:
to whom and when discounts and allowances will be given.
how transportation costs will be handled.
how flexible prices will be.
at what level prices will be set over the product life cycle.
______ is what a customer must give up to get the benefits offered by the rest of a firm’s marketing mix.
Price
Pricing objectives should flow from, and fit in with,
company-level and marketing objectives.
A marketing manager may choose a pricing objective that is:
sales oriented.
status-quo oriented.
profit oriented.
Prices are “administered” when:
firms consciously set their own prices.
A one-price policy means:
offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities.
A flexible-price policy means offering
the same product and quantities to different customers at different prices.
A _____ price policy tries to sell the top of the demand curve at a high price before aiming at more price-sensitive customers.
skimming
Trying to sell a firm’s new product to a large market at one low price is known as:
a penetration pricing policy.
Using temporary price cuts to speed a producer’s new product into a market is known as:
introductory price dealing.
________ are the prices final customers or users are normally asked to pay for products.
Basic list prices
______ are reductions from list price that are given by a seller to a buyer who either gives up some marketing function or provides the function himself.
Discounts
Which of the following statements about rebates is True?
Rebates are refunds paid to consumers after a purchase.
Rebates ensure that the final consumer gets a producer’s price reduction.
Many consumers purchase a product because a rebate is offered but then never request the refund.
Many consumers think that some sellers make it an unnecessary hassle to claim a rebate.
If a producer wants title to pass to a buyer immediately–but still wants to pay the freight bill — the invoice should read:
F.O.B. seller’s factory–freight prepaid.
_____ means setting a fair price level for a marketing mix that really gives the target market superior customer value.
Value pricing
Unfair trade practice acts:
put a lower limit on prices, especially at the wholesale and retail levels.
Price fixing means:
competitors getting together to raise, lower, or stabilize prices.
According to the text, the two basic approaches to price setting are
cost-oriented and demand-oriented price setting.
Most firms in the business world set their prices using:
cost-oriented price setting.
A _____ is a dollar amount added to the cost of products to get the selling price.
markup
The text says “markup” means percent of:
selling price–unless otherwise stated.
The sequence of markups firms use at different levels in a channel is referred to as a(n)
markup chain.
Which of the following is a TRUE statement about markups?
A firm can lose money even when using a high markup.
High markups on a product could lead to low profits when
sales dip due to high prices
Setting prices by adding a “reasonable” markup to a firm’s average cost is called:
average-cost pricing.
Average-cost pricing:
May be very profitable if actual sales are higher than expected.
may lose money for the firm if actual sales are less than expected.
does not take demand into account in setting prices.
Total fixed cost:
is the sum of those costs which do not change in total no matter how much is produced.
The sum of those changing expenses which are closely related to output is called:
total variable cost.
At break-even point (BEP),
the firm’s total sales will equal its total production.
The best pricing tool marketers have for looking at costs and revenue at the same time is
marginal analysis.
The main advantage that marginal analysis has over most other popular pricing methods is that it:
Takes into account both costs and demand.
Customers are likely to be more price sensitive when:
the total expenditure is great.
they have to pay the bill themselves.
the end benefit isn’t very significant.
Which of the following observations concerning a “reference price” is true?
Demand may increase if a firm’s price is lower than a customer’s reference price.
Which of the following statements is true?
Leader pricing means setting some very low prices to get customers into retail stores.
Bait pricing is setting some very low prices to attract customers but trying to sell more expensive models or brands once the customer is in the store.
Price lining is setting a few price levels for a product line and then marking all items at these prices.
Prestige pricing is setting a rather high price to suggest high quality or high status.
_____ means offering a specific price for each possible job rather than setting a price that applies for all customers.
Bid pricing
A good marketing plan sets the frame work for effective _____________ and control.
implementation
_______is the feedback process that helps the marketing manager learn how ongoing plans are working and how to plan for the future.
control
With respect to marketing control,
faster feedback can often be the basis for a competitive advantage
The basic objectives of implementation are to do things
better.
faster.
at lower cost.
Sales analysis is a
detailed breakdown of a company’s sales records.
A._________ looks for exceptions or variations from planned performance.
performance analysis
The best way to break down or analyze sales data is
any of these are correct depending on the situation.
According to the ________, much good information is hidden in summary data.
iceberg principle
Which of the following statements best describes the iceberg principle?
Problems in one area may be offset by good performance in other areas – and thus the problems may not be visible on the surface.
__________are the two basic approaches to handling marketing costs allocation problems.
The full-cost approach and the contribution-margin approach.
A systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function – and of the organization, methods, procedures, and people employed to implement the policies – is called a:
marketing audit.
