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28 Cards in this Set
- Front
- Back
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What is penetration strategy?
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an aggressive strategy used when a retailer seeks large revenues by setting low prices and selling many units
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What is skimming strategy?
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a firm sets premium prices and attracts customers less concerned w/price than service, assortment, and prestige
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Walmart : Publix
as ______ strategy : _______strategy |
penetration : skimming
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In what kind of pricing does a retailer set prices for goods and services and seeks to maintain them for an extended period?
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customary pricing
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T or F: in customary pricing the retailer wants to establish set prices and have consumers take them for granted
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true
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newspapers, candy, arcade games, vending machine items, and foods on restaurant menus are examples of items that use _________ pricing.
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customary
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What is everday low pricing? (EDLP)
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a version of customary pricing. Retailer strives to sell its goods and services at consistently low prices throughout the selling season
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T or F: A firm SHOULD hold prices constant if customer demand varies
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FALSE, it should not!
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T or F: In may cases, a retailer CANNOT or SHOULD NOT use customary pricing
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true
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What kind of pricing is when a retailer alters its prices to coincide w/fluctuations in (VARYING) costs or consumer demand?
May provide excitement due to special sales (seasonal or tend-related) opportunities for customers |
variable pricing
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Demand based fluctuations can be place- or time- based.... what is the difference?
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Place-based fluctuations exist for retailers selling seat locations (concert halls) or room locations (hotels).
Time-based fluctuations occur if consumer demand differs by hour, day, or season |
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What is yield-management pricing?
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a computerized , demand-based, variable pricing technique, whereby a retailer (typically a service firm) determines the combination of prices that yied the greatest total revenues for a given period
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What kind of retails use yield-management pricing?
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airlines and hotels
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What is a one-price policy?
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a retailer charges the same price to all customers buying an item under similiar conditions
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Is one price policy common?
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yes, used by almost all US retailers
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What kind of pricing lets consumers bargain over pricing?
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flexible pricing
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What kind of pricing requires high initial prices and good salespeople?
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flexible
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What is a special form of flexible pricing?
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contingency pricing
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What is contingency pricing?
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A service retailer doesn not get paid until after the service is performed and payment is contingent on the service's being satisfactory
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What is odd pricing?
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when retail prices are set at levels below even dollar values ($0.49 or $199)
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Why is odd pricing effective?
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People feel these prices represent discounts or that the amounts are beneath consumer price ceilings (psychological)
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What is the kind of pricing in which a retailer advertises and sells selected items in its goods/services assortment at less than usual profit margins?
The goal is to increase customer traffic for the retailer so that it can sell regularly priced goods and services in addition to the specially priced items |
leader pricing
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What form of pricing offers discounts to customers who buy in quantity or who buy a praticular bundle?
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multiple unit pricing
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What are 3 reason to use multiple unit pricing?
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■A firm could seek to have shoppers increase their total purchases of an item (If people buy multiple units to stockpile them, instead of consume more, the firm's overall sales don't increase.)
■Helps sell slow-moving and end-of-season merchandise ■Price bundling may increase sales of related items |
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What is price lining?
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rather than stock merchandise at all different price levels, retailers sell merchandise at a limited range of price points, w/each point representing a distinct level of quality
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Department stores generally carry good, better, and best versions of merchandise and price is using ______ _______.
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price lining
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What are retailers advg for price lining?
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■Aids in merchandise planning
■Seek suppliers who offer products at appropriate prices ■Better negotiate w/suppliers ■Reduces inventory ■Stock turnover goes up when the number of models carried is limited |
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What are disadv for retailers when price lining?
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■Depending on price points, may leave excessive gaps ($30 briefcase too cheap, $300 too expensive)
■Inflation can make it tough to keep price points and price ranges ■Markdowns may disrupt the balance in a price line unless all items in a line are reduced proportionally. ■Price lines must be coordinated for complementary product categories, such as blazers, skirts, and shoees |
