Setting the right price

Question 1

basic, long-term pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle

Answer 1

Price Strategy

Question 2

price policy whereby a firm charges a high introductory price, often coupled with heavy promotion

Answer 2

Price Skimming

Question 3

A pricing policy whereby a firm charges a relatively low price for a product when it is first rolled out as a way to reach the mass market

Answer 3

Penetration Pricing

Question 4

Charging a price identical to or very close to the competition’s price

Answer 4

Status Quo Pricing

Question 5

Laws that prohibit wholesalers and retailers from selling below cost

Answer 5

Unfair Trade Practice Acts

Question 6

An agreement between two or more firms on the price they will charge for a product

Answer 6

Price Fixing

Question 7

he practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market

Answer 7

Predatory Pricing

Question 8

The general price level at which the company expects to sell the good or service

Answer 8

Base Price

Question 9

A price reduction offered to buyers buying in multiple units or above a specified dollar amount

Answer 9

Quantity Discount

Question 10

A deduction from list price that applies to the buyer’s total purchases made during a specific period

Answer 10

Cumulative Quantity Discount

Question 11

A deduction from list price that applies to a single order rather than to the total volume of orders placed during a certain period

Answer 11

Non-Cumulative Quantity Discount

Question 12

A basic, long-term pricing framework that establishes the initial price for a product and the intended direction for price movements over the product life cycle

Answer 12

Price Strategy

Question 13

A price reduction offered to a consumer, an industrial user, or a marketing intermediary in return for prompt payment of a bill

Areveal answer
How well did you know this?

Answer 13

Cash Discount

Question 14

A discount to wholesalers and retailers for performing channel functions

Answer 14

Functional Discount (Trade Discount)

Question 15

A price reduction for buying merchandise out of season

Answer 15

Seasonal Discount

Question 16

A payment to a dealer for promoting the manufacturer’s products

Answer 16

Promotional Allowance (Trade Allowance)

Question 17

A cash refund given for the purchase of a product during a specific period

Answer 17

Rebate

Question 18

Setting the price at a level that seems to the customer to be a good price compared to the prices of other options

Answer 18

Value-Based Pricing

Question 19

A price tactic that requires the buyer to absorb the fright costs from the shipping point (“free on board”)

Answer 19

FOB Origin Pricing

Question 20

A price tactic in which the seller pays the actual freight charges and bills every purchaser an identical, flat freight charge

Answer 20

Uniform Delivered Pricing

Question 21

A modification of uniform delivered pricing that divides the United States (or the total market) into segments or zones and charges a flat freight rate to all customers in a given zone

Answer 21

Zone Pricing

Question 22

A price tactic in which the seller pays all or part of the actual freight charges and does not pass them on to the buyer

Answer 22

Freight Absorption Pricing

Question 23

A price tactic that charges freight from a given (basing) point, regardless of the city from which the goods are shipped

Answer 23

Basing-Point Pricing

Question 24

A price tactic that offers all goods and services at the same price (or perhaps two or three prices)

Answer 24

Single-Price Tactic

Question 25

A price tactic in which different customers pay different prices for essentially the same merchandise bought in equal quantities

Answer 25

Flexible Pricing (Variable Pricing)

Question 26

The practice of offering a product line with several items at specific price points

Answer 26

Price Lining

Question 27

A price tactic in which a product is sold near or even below cost in the hope that shoppers will buy other items once they are in the store

Answer 27

Leader Pricing (Loss-Leader Pricing)

Question 28

A price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high-pressure selling to persuade consumers to buy more expensive merchandise

Answer 28

Bait Pricing

Question 29

A price tactic that uses odd-numbered prices to connote bargains and even-numbered prices to imply quality

Answer 29

Odd-Even Pricing (Psychological Pricing)

Question 30

Marketing two or more products in a single package for a special price

Answer 30

Price Bundling

Question 31

educing the bundle of services that comes with the basic product

Answer 31

Unbundling

Question 32

A price tactic that charges two separate amounts to consumer a single good or service

Answer 32

Two-Part Pricing

Question 33

An extra fee paid by the consumer for violating the terms of the purchase agreement

Answer 33

Consumer Penalty

Question 34

Setting prices for an entire line of products

Answer 34

Product Line Pricing

Question 35

A cost that is shared in the manufacturing and marketing of several products in a product line

Answer 35

Joint Cost

Question 36

A price tactic used for industrial installations and many accessory items in which a firm price is not set until the item is either finished or delivered

Answer 36

Delayed-Quotation Pricing

Question 37

A price tactic in which the final selling price reflects cost increases incurred between the time the order is placed and the time delivery is made

Answer 37

Escalator Pricing