MKT 300 EXAM 5 STUDY GUIDE
Price - Answers -What a customer must give up to get the benefits offered by the rest
of a firms marketing mix
Dynamic Pricing - Answers -Means changing product prices based on demand, the
type of customer, or the state of the weather
Target Return Objective - Answers -Sets a specific level of profit as an objective
Profit Maximization Objective - Answers -Seeks to get as much profit as possible.
Sales-Oriented Objective - Answers -Seeks some level of unit sales, dollar sales, or
share of market - WITHOUT REFERRING TO PROFIT
Status-Quo Objective - Answers -Don't-rock-the-PRICING-boat objectives. Managers
may say they want to stabilize prices, or meet competition, or even avoid competition.
This type of thinking is most common when the total market is NOT growing.
Non-Price Competition - Answers -Aggressive action on one or more of the Ps other
than price.
Administered Prices - Answers -Consciously set prices. Instead of letting daily market
forces decide pricing, firms set the prices themselves.
One-Price Policy - Answers -Means offering the same price to all customers who
purchase products under essentially the same conditions and in the same quantities
Flexible-Price Policy - Answers -Means offering the same product and quantities to
different customers at different prices
Skimming-Price Policy - Answers -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
Penetration-Price Policy - Answers -Tries to sell to whole market at one low price
Introductory Price Dealing - Answers -Temporary price cuts—to speed new products
into a market and get customers to try them
Basic-List Prices - Answers -The prices final customers or users are normally asked to
pay for products
Discounts - Answers -Are reductions from list price given by a seller to buyers who
either give up some marketing function or provide the function themselves
, Quantity Discounts - Answers -Discounts offered to encourage customers to buy in
larger amounts. 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
Cumulative Quantity Discounts - Answers -Apply to purchases over a given period—
such as a year—and the discount usually increases as the amount purchased
increases. Cumulative discounts encourage repeat buying by reducing the customer's
cost for additional purchases.
Noncumulative Quantity Discounts - Answers -Apply only to individual orders. Such
discounts encourage larger orders but do not tie a buyer to the seller after that one
purchase
Seasonal Discounts - Answers -Discounts offered to encourage buyers to buy earlier
than present demand requires
Net - Answers -Means that payment for the face value of the invoice is due
immediately. These terms are sometimes changed to net 10 or net 30, which means
payment is due within 10 or 30 days of the date on the invoice.
Cash Discounts - Answers -Reductions in price to encourage buyers to pay their bills
quickly. The terms for a cash discount usually modify the net terms.
3/15 Net 40 - Answers -Means the buyer can take a 3 percent discount off the face
value of the invoice if the invoice is paid within 15 days. Otherwise, the full face value is
due within 40 days. And it usually is stated or understood that an interest charge will be
added after the 40-day free-credit period.
Trade (Functional) Discount - Answers -A list price reduction given to channel members
for the job they are going to do
Sale Price Discount - Answers -A temporary discount from the list price. Sale price
discounts encourage immediate buying. In other words, to get the sale price, customers
give up the convenience of buying when they want to buy and instead buy when the
seller wants to sell.
Everyday Low Prices - Answers -Setting a low list price rather than relying on frequent
sales, discounts, or allowances
Allowances - Answers -Like discounts, are given to final consumers, business
customers, or channel members for doing something or accepting less of something.
Advertising Allowances - Answers -Price reductions given to firms in the channel to
encourage them to advertise or otherwise promote the supplier's products locally
Price - Answers -What a customer must give up to get the benefits offered by the rest
of a firms marketing mix
Dynamic Pricing - Answers -Means changing product prices based on demand, the
type of customer, or the state of the weather
Target Return Objective - Answers -Sets a specific level of profit as an objective
Profit Maximization Objective - Answers -Seeks to get as much profit as possible.
Sales-Oriented Objective - Answers -Seeks some level of unit sales, dollar sales, or
share of market - WITHOUT REFERRING TO PROFIT
Status-Quo Objective - Answers -Don't-rock-the-PRICING-boat objectives. Managers
may say they want to stabilize prices, or meet competition, or even avoid competition.
This type of thinking is most common when the total market is NOT growing.
Non-Price Competition - Answers -Aggressive action on one or more of the Ps other
than price.
Administered Prices - Answers -Consciously set prices. Instead of letting daily market
forces decide pricing, firms set the prices themselves.
One-Price Policy - Answers -Means offering the same price to all customers who
purchase products under essentially the same conditions and in the same quantities
Flexible-Price Policy - Answers -Means offering the same product and quantities to
different customers at different prices
Skimming-Price Policy - Answers -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
Penetration-Price Policy - Answers -Tries to sell to whole market at one low price
Introductory Price Dealing - Answers -Temporary price cuts—to speed new products
into a market and get customers to try them
Basic-List Prices - Answers -The prices final customers or users are normally asked to
pay for products
Discounts - Answers -Are reductions from list price given by a seller to buyers who
either give up some marketing function or provide the function themselves
, Quantity Discounts - Answers -Discounts offered to encourage customers to buy in
larger amounts. 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
Cumulative Quantity Discounts - Answers -Apply to purchases over a given period—
such as a year—and the discount usually increases as the amount purchased
increases. Cumulative discounts encourage repeat buying by reducing the customer's
cost for additional purchases.
Noncumulative Quantity Discounts - Answers -Apply only to individual orders. Such
discounts encourage larger orders but do not tie a buyer to the seller after that one
purchase
Seasonal Discounts - Answers -Discounts offered to encourage buyers to buy earlier
than present demand requires
Net - Answers -Means that payment for the face value of the invoice is due
immediately. These terms are sometimes changed to net 10 or net 30, which means
payment is due within 10 or 30 days of the date on the invoice.
Cash Discounts - Answers -Reductions in price to encourage buyers to pay their bills
quickly. The terms for a cash discount usually modify the net terms.
3/15 Net 40 - Answers -Means the buyer can take a 3 percent discount off the face
value of the invoice if the invoice is paid within 15 days. Otherwise, the full face value is
due within 40 days. And it usually is stated or understood that an interest charge will be
added after the 40-day free-credit period.
Trade (Functional) Discount - Answers -A list price reduction given to channel members
for the job they are going to do
Sale Price Discount - Answers -A temporary discount from the list price. Sale price
discounts encourage immediate buying. In other words, to get the sale price, customers
give up the convenience of buying when they want to buy and instead buy when the
seller wants to sell.
Everyday Low Prices - Answers -Setting a low list price rather than relying on frequent
sales, discounts, or allowances
Allowances - Answers -Like discounts, are given to final consumers, business
customers, or channel members for doing something or accepting less of something.
Advertising Allowances - Answers -Price reductions given to firms in the channel to
encourage them to advertise or otherwise promote the supplier's products locally
