What is geographical pricing strategy?

Basing-point pricing and freight-absorption pricing

Identify the two broad strategies companies use when setting prices for the first time.
Market-skimming pricing and market-penetration pricing

Identify the rules for fair play and pricing.
Local, state, and federal laws

Identify the five product mix pricing situations.
Product line pricing, optional-product pricing, captive-product pricing, by-product pricing, and product bundle pricing

What is product bundle pricing?
A combination of several products offered at a reduced rate

Identify the organization that approves the sale of marketable drugs.
FDA

Identify the document that governs price discrimination.
Robinson-Patman Act

When is price discrimination allowed?
When the seller can prove that costs are different when selling to different retailers

What is the purpose of retail price maintenance?
Manufacturers require dealers to change specific retail prices for products.

When does deceptive pricing occur?
When a seller states price or price savings that mislead consumers or are not actually available to consumers

Segmented pricing goes by many names.
True

The most straightforward retail pricing cue is a sale sign.
True

Price competition is a core element of our free-market economy.
True

Price fixing is legal.
False

Pricing products below list price and sometimes even below cost to create buying excitement and urgency is called price cues.
False

A company must decide how to price its products for customers located in different parts of the country.
True

Uniformed delivered pricing and base-point pricing are two forms of geographical pricing.
False

A firm price change will result in the firm worrying about the reactions of consumers.
False

The Robinson-Patman Act seeks to prevent uniform price discrimination.
True

Offering same prices at similar locations is called location pricing.
False

What does the company's supply chain consist of?
Upstream and downstream partners

What does the company's pricing of a product depend on?
Whether the company works with national discount chains, uses high-quality specialty stores, or sells to consumers via the Web

What is a direct marketing channel?
A marketing channel that has no intermediary levels

What are indirect marketing channels?
A channel containing one or more intermediary levels

What do marketing channels consist of?
Firms that have partnered for their common good


What is a multichannel distribution system?
A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments

How are the company's channel objectives influenced?
By the nature of the company, its products, its marketing intermediaries, its competitors, and the government

Identify the next step a company should take after it has defined its channels.
Identify its major channel alternatives in terms of types of intermediaries, the number of intermediaries, and the responsibilities of each channel
member

When companies participate in intensive distribution, what activity are they performing?
Stocking their product in as many outlets as possible

When does exclusive dealing occur?
When sellers require that certain dealers not handle competitors' products

Upstream and downstream partners are not part of the other firms' supply chains.
False

Many companies have used imaginative distribution systems to gain a competitive advantage.
True

Horizontal conflict only occurs between buyers and sellers.
False

The distribution system is complex and hard to penetrate in some markets.
True

Selling a product is sometimes easier than getting it to customers.
True

Storage warehouses store goods for short periods of time.
False

Managers only look for new ways to make inventory management more efficient when their products are on the decline.
False

More companies are developing the concept of integrated logistics management.
True

Companies should work with other channel partners to improve whole-channel distribution.
True

Companies no longer use third-party logistics.
False

Identify the factors that contributed to Caterpillar's success.
High quality products, flexible and efficient manufacturing, and a steady stream of innovative new products

What is a channel level?
The layer of marketing intermediaries that perform work that bring the product and its ownership closer to the final buyer

What causes channel conflict?
Disagreements over goals, roles, and rewards

What is a conventional distribution channel?
A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits,
even at the expense of profits for the system as a whole

What does a vertical marketing system (VMS) consist of?
Producers, wholesalers, and retailers acting as a unified system

Describe a contractual VMS.
A contractual VMS is a vertical marketing system in which independent firms join together at different levels of production and distribution to obtain
more economies or sales impact than they could achieve alone

How can product and service producers remain competitive?
By developing new channel opportunities

What does designing a channel system involve?
Analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating them

What is exclusive distribution?
A strategy that sellers use to allow only certain outlets to carry its products


What is the goal of integrated supply chain management?
To harmonize all of the company's logistics decisions

Caterpillar's distribution system is built on a strong marketing support system.
False

Vertical conflict does not exist.
False

Designing the marketing channel starts with finding out what target consumers want from the channel.
True

It is not necessary to identify the company's major channel alternatives.
False

International marketers have a limited range of channel alternatives.
False

Companies should not be concerned with relationship management.
False

Physical distribution and logistics effectiveness does not have a major impact on both customer satisfaction and company costs.
False

Marketing logistics only involves outbound distribution.
True

Distribution centers store goods for moderate to long periods of time.
False

Inventory management does not affect customer satisfaction.
False

Identify the competitor to which Kmart lost their top discount retailer position.
Wal-Mart

What action did Kmart take in an effort to become more competitive with Wal-Mart and Target?
Slashed everyday prices on more than 50,000 items nationwide

What is product line pricing?
The price steps set between the various products in a line.

Identify the strategies used for setting prices.
Market-skimming prices and market penetrating prices

What is a functional discount called?
Trade discount

What are segmented prices also known as?
Revenue management

What does psychological pricing consider?
Prices

What is sign-post pricing used on?
Frequent purchase products which consumers tend to have accurate price knowledge about

For whom are pricing cues helpful?
Consumers

What does promotional pricing include?
Loss leader and longer warranties

In order to become competitive with Wal-Mart and Target, Kmart opened additional stores.
False

A sign of Kmart's downfall occurred when customers attempted to purchase advertised items that were not available in stores.
True

Kmart closed all stores in 2001.
False

Companies bringing out new products face the challenge of setting prices for the first time.
True


Market penetrating pricing is a low initial method used to attract a large number of buyers quickly.
True

Deciding on the price steps to set between the various products is called product line pricing.
True

Razor blades and video games are examples of captive products.
True

Combining several products at a reduced price is called product bonding pricing.
False

Quantity discounts are price reductions for buyers who buy in large quantities.
True

When a company sells a product or service to more than one party, the selling prices never change.
False