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BUSML 3250 Chapter 11 Exam Questions and Answers
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BUSML 3250 Chapter 11 Exam Questions and Answers
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BUSML 3250 Chapter 11 ExamQuestions and Answers
market-skimming pricing (price skimming) - Answer-setting a high price for a new
product to skim maximum revenues layer by layer from the segments willing to pay the
higher price; the company makes fewer but more profitable sales
market-penetration pricing - Answer-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 - Answer-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 - Answer-the pricing of optional or accessory products along
with a main product
captive-product pricing - Answer-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 - Answer-setting a price for by-products in order to make the main
product's price more competitive (Minute Maid--orange peels don't go to waste)
product bundle pricing - Answer-combining several products and offering the bundle at
a reduced price
discount - Answer-a straight reduction in price on purchases during a stated period of
time or of larger quantities
allowance - Answer-promotional money paid by manufacturers to retailers in return for
an agreement to feature the manufacturer's products in some way
segmented pricing - Answer-selling a product or service at two or more prices, where
the difference in prices is not based on differences in cost (such as first class airline
seat--product-form pricing)
psychological pricing - Answer-pricing that considers the psychology of prices and not
simply the economics; the price is used to say something about the product
reference prices - Answer-prices that buyers carry in their minds and refer to when they
look at a given product (such as putting store brand cereal next to name brand)
promotional pricing - Answer-temporarily pricing products below the list price, and
sometimes even below cost, to increase short-run sales
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