MARKETING 240 CORRECT STUDY QUESTIONS
AND ANSWERS SURE A+
✔✔Value based pricing - ✔✔an approach that focuses on the overall value of the
product offering as perceived by consumers, who determine value by comparing the
benefits they expect the product to deliver w the sacrifice they will need to make to
acquire the product
✔✔Individualized pricing - ✔✔Refers to the process of charging different prices for
goods or services based on the type of customer; time of the day, week, or even
season; and level of demand. Also called individualized pricing.
✔✔Cost-based pricing (also covered in lecture) - ✔✔An approach that determines the
final price to charge by starting w the cost, without recognizing the role that consumers
or competitors' prices play in the marketplace.
✔✔Everyday low prices - ✔✔A strategy companies use to emphasize the continuity of
their retail prices at a level somewhere between the regular, nonsale price and the
deep-discount sale prices their competitors may offer.
✔✔High/low pricing - ✔✔A pricing strategy that relies on the promotion of sales, during
which prices are temporarily reduced to encourage purchases.
, ✔✔Attracts two distinct market segments - ✔✔those who are not price sensitive and are
willing to pay the high price and more precise sensitive customers who wait for the low
sale price
✔✔Coupons - ✔✔Provides a stated discount to consumers on the final selling price of a
specific item; the retailer handles the discount.
✔✔Rebates - ✔✔A consumer discount in which a portion of the purchase price is
returned to the buyer in cash; the manufacturer, not the retailer, issues the refund.
✔✔Penetration pricing - ✔✔A new product or service pricing strategy in which the initial
price is set relatively low w the objective of building sales, market share, and profits
quickly and to deter competition from entering the market.
✔✔Price skimming - ✔✔A strategy of selling a new product or service at a high price
that innovators and early adopters are willing to pay in order to obtain it; after the high-
price market segment becomes saturated and sales begin to slow down, the firm
generally lowers the price to capture (or skim) the next most price-sensitive segment.
✔✔Direct Supply Chain - ✔✔A supply chain in which there are no intermediaries; the
manufacturer sells directly to the buyer.
✔✔Indirect supply chain - ✔✔When one or more intermediaries work w manufacturers
to provide goods and services to customers.
✔✔Distribution intensity - ✔✔The number of supply chain members to use at each level
of the supply chain.
✔✔Intensive Distribution - ✔✔A strategy designed to get products into as many outlets
as possible.
✔✔Exclusive distribution - ✔✔Strategy in which only selected retailers can sell a
manufacturer's brand
✔✔Selective distribution - ✔✔Lies between the intensive and exclusive distribution
strategies; uses a few selected customers in a territory.
✔✔Advertising - ✔✔a paid form of communication delivered through the media from an
identifiable source
✔✔Informative advertising - ✔✔communication used to create and build brand
awareness, w the ultimate goal of moving the consumer the buying cycle to a purchase
AND ANSWERS SURE A+
✔✔Value based pricing - ✔✔an approach that focuses on the overall value of the
product offering as perceived by consumers, who determine value by comparing the
benefits they expect the product to deliver w the sacrifice they will need to make to
acquire the product
✔✔Individualized pricing - ✔✔Refers to the process of charging different prices for
goods or services based on the type of customer; time of the day, week, or even
season; and level of demand. Also called individualized pricing.
✔✔Cost-based pricing (also covered in lecture) - ✔✔An approach that determines the
final price to charge by starting w the cost, without recognizing the role that consumers
or competitors' prices play in the marketplace.
✔✔Everyday low prices - ✔✔A strategy companies use to emphasize the continuity of
their retail prices at a level somewhere between the regular, nonsale price and the
deep-discount sale prices their competitors may offer.
✔✔High/low pricing - ✔✔A pricing strategy that relies on the promotion of sales, during
which prices are temporarily reduced to encourage purchases.
, ✔✔Attracts two distinct market segments - ✔✔those who are not price sensitive and are
willing to pay the high price and more precise sensitive customers who wait for the low
sale price
✔✔Coupons - ✔✔Provides a stated discount to consumers on the final selling price of a
specific item; the retailer handles the discount.
✔✔Rebates - ✔✔A consumer discount in which a portion of the purchase price is
returned to the buyer in cash; the manufacturer, not the retailer, issues the refund.
✔✔Penetration pricing - ✔✔A new product or service pricing strategy in which the initial
price is set relatively low w the objective of building sales, market share, and profits
quickly and to deter competition from entering the market.
✔✔Price skimming - ✔✔A strategy of selling a new product or service at a high price
that innovators and early adopters are willing to pay in order to obtain it; after the high-
price market segment becomes saturated and sales begin to slow down, the firm
generally lowers the price to capture (or skim) the next most price-sensitive segment.
✔✔Direct Supply Chain - ✔✔A supply chain in which there are no intermediaries; the
manufacturer sells directly to the buyer.
✔✔Indirect supply chain - ✔✔When one or more intermediaries work w manufacturers
to provide goods and services to customers.
✔✔Distribution intensity - ✔✔The number of supply chain members to use at each level
of the supply chain.
✔✔Intensive Distribution - ✔✔A strategy designed to get products into as many outlets
as possible.
✔✔Exclusive distribution - ✔✔Strategy in which only selected retailers can sell a
manufacturer's brand
✔✔Selective distribution - ✔✔Lies between the intensive and exclusive distribution
strategies; uses a few selected customers in a territory.
✔✔Advertising - ✔✔a paid form of communication delivered through the media from an
identifiable source
✔✔Informative advertising - ✔✔communication used to create and build brand
awareness, w the ultimate goal of moving the consumer the buying cycle to a purchase
