Exam 20: Setting the Right Price

_____ are extra fees paid by consumers for violating the terms of purchase agreements.

Marketing two or more products in a single package for a special price is known as:

Penetration pricing is sometimes referred to as a "market-plus" approach to pricing.

If an online retailer lists shipping charges according to the dollar amount of merchandise purchased,you know that it is using _____ pricing.

A base price may be lowered through the use of a discount.Discounts take a variety of forms and have several different objectives.Name and define three types of discounts (do not include allowances or rebates).State the main objective of the each type of discount you identify.

Marketers must take care when using _____ since a lower price often signals to consumers that product quality is also low.

Eustis Lee is a lawyer who only handles DUI cases.No matter how quickly he resolves the case,he charges each customer $5,000.Lee justifies the fee because of his lengthy education and the years he has spent learning how the judicial system operates.Which pricing policy is the lawyer using?

In 2008 United Airlines and American Airlines disclosed settlements in a class-action lawsuit over allegations of airfreight price fixing.This means the companies _____.

Price fixing is only illegal in some instances.

Private golf courses charge members an initial membership fee and monthly green fees. This is an example of two-part pricing.

A discount off the base price to customers who pay immediately,or within a specified time period,is called a:

Last year,a single infield box ticket for an Atlanta Braves baseball game cost $40,but fans who bought a season pass for the same seat got a reduced price.This $40 price was a _____ price.

One disadvantage of using a penetration pricing policy is that the high unit profit margins will attract potential competitors into production of similar products.

The practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market is called:

A retailer of furniture for babies that is allowed to deduct 3 percent from its total bill if it pays by a specific date is receiving a promotional discount.

When a channel intermediary is compensated for the ordinary services and tasks performed within the channel of distribution,the compensation usually comes in the form of a discount from base price.This discount is called a:

Name and describe the three basic strategies for setting a price on a new good or service.Under what conditions is each of the three basic pricing methods successful?

Manufacturers know the approximate price level they can expect when establishing a product price.This approximate price is called the base price.

When Microsoft introduced its Zune MP3 player,many people thought it would capture the MP3 player market by pricing its product so low that a smaller competitor,like the Apple iPod,would be unable to compete.If Microsoft had used this approach it have been would be guilty of _____.

A(n)_____ allows for price increases based on the cost-of-living index or some other formula.