Define promotional allowance

1. Razer-Edge makes machines for sharpening the blades used by butchers to slice meat. When Razer-Edge priced its Primary Sharpener, its salespeople were told that it would be sold for $1,700, but that there would be room for discounts and flexibility. The $1,700 price is the _____ price for the Primary Sharpener.

base

zone

demand

channel leader

functional
10 points
Question 2
1. The DCS Stainless Steel Gas Grill for outside cooking costs $3,995. The market for a grill that could easily replace a kitchen range is limited even though a lot of people have seen articles about this grill in cooking magazines and in the cooking section of newspapers. There is no potential competitor for this grill. The _____ strategy is probably best.

price-skimming

penetration pricing

status quo

cost bundling

price-lining
10 points
Question 3
1. One popular cost-oriented pricing tactic is culling low-profit margin products from the product line. Which of the following statements does NOT describe a reason why a marketing manager would want to avoid this tactic?

The low-margin item may be a large volume contributor to profit.

The tactic focuses special attention on the costs of producing each line and their contribution to overhead.

The loss of one item in the line may reduce the economies of scale.

The image of the rest of the product line may suffer if there is a “hole” in the line.

Other items in the line will now have to cover more fixed costs.
10 points
Question 4
1. A _____ discount is a deduction from list prices that is aimed at encouraging customer loyalty.

cumulative quantity

noncumulative quantitative

functional

cash

frequent buyer
10 points
Question 5
1. An Internet picture frame manufacturer offers retailers reduced prices on any combination of size or style frames purchased. The discount is shown as they shop and adjusted as the quantity of frames purchased increases. What common form of purchase discount is the frame manufacturer using?

rebate

cash discount

quantity discount

promotional allowance

functional discount
10 points
Question 6
1. A 16-ounce bottle of Prairie Herb vinegar sells for $4.95, and a 16-ounce bottle of Heinz vinegar costs $1.05. Prairie Herb vinegar is new to the market, perceived to be of higher quality, and provides a unique flavor to foods even though it is used in the same way as Heinz vinegar. Prairie Herb vinegar is most likely using a _____ policy.

penetration pricing

status quo pricing

price-skimming

bundling cost pricing

geodemographic pricing
10 points
Question 7
1. Quantity discounts are most often used to:

reward the buyer who pays in cash

encourage large orders

increase supply for a specific raw material

reward a channel intermediary for performing some service

shift the storage function backward to the supplier
10 points
Question 8