MARK 3336 EXAM #3 VERIFIED STUDY GUIDE
Market-skimming pricing (price skimming) - Answers - Setting a high price for a new
product to skim maximum revenues layer by layer from the segments willing to pay the
high price; the company makes fewer but more profitable sales
Market-penetration pricing - Answers - Setting a low price for a new product in order to
attract a large number of buyers and a large market share
Product line pricing - Answers - Setting the price steps between various products in a
product line based on cost differences between the products, customer evaluations of
different features, and competitors' prices
Optional-product pricing - Answers - The pricing of optional or accessory products along
with a main product
Captive-product pricing - Answers - Setting a price for products that must be used along
with a main product, such as blades for a razor and games for a video-game console
By-product pricing - Answers - Setting a price for by-products in order to make the main
product's price more competitive
Product bundle pricing - Answers - Combining several products and offering the bundle
at a reduced price
Discount - Answers - A straight reduction in price on purchases during a stated period of
time or of larger quantities
Allowance - Answers - Promotional money paid by manufacturers to retailers in return
for an agreement to feature the manufacturer's products in some way
Segmented pricing - Answers - Selling a product or service at two or more prices, where
the difference in prices is not based on differences in costs
Psychological pricing - Answers - Pricing that considers the psychology of prices and
not simply the economics; the price is used to say something about the product
Reference prices - Answers - Prices that buyers carry in their minds and refer to when
they look at a given product
Promotional pricing - Answers - Temporarily pricing products below the list price, and
sometimes even below cost, to increase short-run sales
, Geographical pricing - Answers - Setting prices for customers located in different parts
of the country or world
FOB-origin pricing - Answers - A geographical pricing strategy in which goods are
placed free on board a carrier; the customer pays the freight from the factory to the
destination
Uniform-delivered pricing - Answers - A geographical pricing strategy in which the
company charges the same price plus freight to all customers, regardless of their
location
Zone pricing - Answers - A geographical pricing strategy in which the company sets up
two or more zones. All customers within a zone pay the same total price; the more
distant the zone, the higher the price
Basing-point pricing - Answers - A geographical pricing strategy in which the seller
designates some city as a basing point and charges all customers the freight cost from
that city to the customer
Freight-absorption pricing - Answers - A geographical pricing strategy in which the seller
absorbs all or part of the freight charges in order to get the desired business
Dynamic pricing - Answers - Adjusting prices continually to meet the characteristics and
needs of individual customers and situations
Value delivery network - Answers - A network composed of the company, suppliers,
distributors, and, ultimately, customers who partner with each other to improve the
performance of the entire system in delivering customer value
Marketing channel (distribution channel) - Answers - A set of interdependent
organizations that help make a product or service available for use or consumption by
the consumer or business user
Channel level - Answers - A layer of intermediaries that performs some work in bringing
the product and its ownership closer to the final buyer
Direct marketing channel - Answers - A marketing channel that has no intermediary
levels
Indirect marketing channel - Answers - A marketing channel containing one or more
intermediary levels
Channel conflict - Answers - Disagreements among marketing channel members on
goals, roles, and rewards--who should do what and for what rewards
Market-skimming pricing (price skimming) - Answers - Setting a high price for a new
product to skim maximum revenues layer by layer from the segments willing to pay the
high price; the company makes fewer but more profitable sales
Market-penetration pricing - Answers - Setting a low price for a new product in order to
attract a large number of buyers and a large market share
Product line pricing - Answers - Setting the price steps between various products in a
product line based on cost differences between the products, customer evaluations of
different features, and competitors' prices
Optional-product pricing - Answers - The pricing of optional or accessory products along
with a main product
Captive-product pricing - Answers - Setting a price for products that must be used along
with a main product, such as blades for a razor and games for a video-game console
By-product pricing - Answers - Setting a price for by-products in order to make the main
product's price more competitive
Product bundle pricing - Answers - Combining several products and offering the bundle
at a reduced price
Discount - Answers - A straight reduction in price on purchases during a stated period of
time or of larger quantities
Allowance - Answers - Promotional money paid by manufacturers to retailers in return
for an agreement to feature the manufacturer's products in some way
Segmented pricing - Answers - Selling a product or service at two or more prices, where
the difference in prices is not based on differences in costs
Psychological pricing - Answers - Pricing that considers the psychology of prices and
not simply the economics; the price is used to say something about the product
Reference prices - Answers - Prices that buyers carry in their minds and refer to when
they look at a given product
Promotional pricing - Answers - Temporarily pricing products below the list price, and
sometimes even below cost, to increase short-run sales
, Geographical pricing - Answers - Setting prices for customers located in different parts
of the country or world
FOB-origin pricing - Answers - A geographical pricing strategy in which goods are
placed free on board a carrier; the customer pays the freight from the factory to the
destination
Uniform-delivered pricing - Answers - A geographical pricing strategy in which the
company charges the same price plus freight to all customers, regardless of their
location
Zone pricing - Answers - A geographical pricing strategy in which the company sets up
two or more zones. All customers within a zone pay the same total price; the more
distant the zone, the higher the price
Basing-point pricing - Answers - A geographical pricing strategy in which the seller
designates some city as a basing point and charges all customers the freight cost from
that city to the customer
Freight-absorption pricing - Answers - A geographical pricing strategy in which the seller
absorbs all or part of the freight charges in order to get the desired business
Dynamic pricing - Answers - Adjusting prices continually to meet the characteristics and
needs of individual customers and situations
Value delivery network - Answers - A network composed of the company, suppliers,
distributors, and, ultimately, customers who partner with each other to improve the
performance of the entire system in delivering customer value
Marketing channel (distribution channel) - Answers - A set of interdependent
organizations that help make a product or service available for use or consumption by
the consumer or business user
Channel level - Answers - A layer of intermediaries that performs some work in bringing
the product and its ownership closer to the final buyer
Direct marketing channel - Answers - A marketing channel that has no intermediary
levels
Indirect marketing channel - Answers - A marketing channel containing one or more
intermediary levels
Channel conflict - Answers - Disagreements among marketing channel members on
goals, roles, and rewards--who should do what and for what rewards
