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Marketing 309
Chapter 14
37
Marketing
Undergraduate 3
03/05/2013

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Term
advertising allowance
Definition
Tactic of offering a price reduction to channel members if they agree to feature the manufacturer's product in their advertising and promotional efforts
Term
Bait-and-switch
Definition
A deceptive practice of luring customers into the store with a very low advertised price on an item only to aggressively pressure them into purchasing a higher priced item
Term
Cash Discount
Definition
Tactic of offeringa reduction in the invoice cost if the buyer pays the invoice prior to the end of the discount period
Term
Competitor-based pricing method
Definition
A strategy that involves pricing below, at , or above competitors' offerings
Term
cost-based pricing method
Definition
A pricing strategy that involves first determining the costs of producing or providing a product and then adding a fixed amount above that total to arrive at the selling price
Term
cost of ownership method
Definition
A value based method for setting prices that determines the total cost of owning the product over its useful life.
Term
Coupon
Definition
Provides a stated discount to consumers on the final selling price of a specific item
Term
Cumulative Quantity Discount
Definition
Pricing tactic that offers a discount based on the amount purchased over a specified period and usually involves several transactions
Term
Everyday Low Pricing
Definition
A strategy companies use to emphasize the continuity of the retail prices at a level somewhere between the regular nonsale price and the deep-discount sales prices their competitors may offer
Term
Experience Curve Effect
Definition
refers to the drop in unit cost as the accumulated volume sold increases; as sales continue to grow, the costs continue to drop allowing even further reductions in the price
Term
High/low Pricing
Definition
A pricing strategy that relies on the promotion of sales. during which prices are temporarily reduced to encourage purchases
Term
Horizontal Price Fixing
Definition
Occurs when competitors that produce and sell competing products collude, or work together, to control prices, effectively taking price out of the decision process for consumers
Term
Improvement Value
Definition
Represents an estimate of how much more consumers are willing to pay for a product relative to other comparable products.
Term
Leader Pricing
Definition
consumer pricing tactic that attempts to buuld store traffic by aggressively pricing and advertising a regularly purchased item, often prices at or just above a store's price
Term
Lease
Definition
A written agreement under which the owner of an item or property use for a specified period of time in exchange for a fee
Term
Loss Leader Pricing
Definition
Loss leaser pricing takes the tactic of leader pricing one step further by lowering the price below the store's cost
Term
Markdowns
Definition
Reductions retailers take on the initial selling price of the product or service
Term
Market Penetration Strategy
Definition
A growth strategy the employs the existing marketing mix and focuses the firm's efforts on existing customers
Term
Noncumulative Quantity Discount
Definition
pricing tactic that offers a discount based on only the amount purchases in a single order
Term
Odd Prices
Definition
Prices that end in odd numbers
Term
Predatory Pricing
Definition
A firm's practice of setting a very low price for one or more of its products with the intent to drive its competition out of business
Term
Price Bundling
Definition
Consumer pricing tactic of selling more than one product for a single lower price than what the items would cost if purchased by themselves
Term
Price Discrimination
Definition
The practice of selling the same product to different resellers or to the ultimate consumer at different prices
Term
Price Fixing
Definition
The practice of colluding with other firms to control prices
Term
Price Lining
Definition
Consumer market pricing tactic of establishing a price floor and price ceiling for an entire line of similar products and then setting a few other price points in between to represent distinct difference in quality
Term
Price Skimming
Definition
A strategy of selling a new product or service at a high price that innovators and early adapters are willing to pay in order to obtain it
Term
Pricing tactics
Definition
Short-term methods in contrast to long term pricing strategies used to focus on company objectives, cost, customers, competition, or channel members
Term
Quantity Discount
Definition
pricing tactic of offering a reduced price according to the amount purchased
Term
Rebate
Definition
A consumer discount in which a portion of the purchase price is returned to the buyer in cash
Term
Reference Price
Definition
The price against which buyers compare the actual selling price of the product and the facilitates their evaluation process
Term
Seasonal Discount
Definition
Pricing tactic of offering an additional reduction as an incentive to retailers to order merchandise in advance of the normal buying season
Term
Size discount
Definition
The most common implementation of quantity discount at the consumer level
Term
Slotting Allowances
Definition
fees firms pay to retailers simply to get new products into stores or to gain more or better shelf space for their products
Term
Uniform Delivered Pricing
Definition
the shipper charges one rate, no matter where the buyer is loated
Term
Value-Based Pricing Method
Definition
A pricing strategy that involves first determining the perceived value of the product from the customer's point of view and then pricing accordingly
Term
Vertical Prices Fixing
Definition
Occurs when parties at different levels of the same marketing channel collude to control the prices passed on to consumers
Term
Zone Pricing
Definition
the shippers sets different prices depending on a geographical division of the delivery areas
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