CHAP 5: PRICING

1/ A _______________is a rule or habit, consistently applied, that defines the criteria under which a company will change a price for an individual customer, for a limited period of time or for particular transactions.

• a. Price tactics
• b. Price structure
• c. Price policy
• d. Price strategy

2/ Powerful buyers often create a list of substitutes for the preferred supplier (seller) to force him to compromise the price. Every time the preferred supplier matches, they minimize the expectation that the supplier’s differentiation has a justifiable economic value. This is the result of ____________ price negotiation made by the supplier.

• a. reactive, ad-hoc
• b. proactive, ad-hoc
• c. reactive, post-hoc
• d. proactive, policy-based

3/Key set of pricing policy includes: Policies for price negotiation, Policies for Responding to Price Objections, _________________, Policies for Dealing with an Economic Downturn and Policies for Promotional Pricing.

• a. Policies for Managing Price Increases
• b. Policies for Managing optimal revenue
• c. Policies for Managing optimal prices
• d. Policies for Managing Price decreases

4/Two principles to develop pricing policies for dealing with an economic downturn are sustaining the business and not triggering a ______________.

• a. Volume war
• b. Revenue war
• c. Price war
• d. Market share war

5/Marketers often use promotional pricing for ___________ under the form of discounts to encourage customer to investigate the supplier’s offer.

• a. unsought goods
• b. credence goods
• c. search goods
• d. experience goods

6/___________________ Price negotiation can empower the sales reps with pre-approved value trade-offs and discount policies and build credibility with the customer by offering the customer win-win, or at least win–not lose trade-offs.

• a. Proactive, Policy-Based
• b. Reactive, post-hoc
• c. Reactive, ad-hoc
• d. Proactive, ad-hoc

7/Process to create and modify pricing policy includes the following steps: Collecting requests for price exception, Classification those requests, Create and modify pricing policy, collecting _________ about implemented price policy.

• a. profit
• b. protest
• c. feedback
• d. acceptance

8/In order to sustain business but not triggering a price war, the firm should “__________” their pricing for customers willing to make long-term commitments based on market conditions in their customer’s market (i.e., inflation rate, Consumer Purchase Index, etc.)

• a. Reduce
• b. Index
• c. Discount
• d. vary

9/____________________involves establishing prices that alignment across macro segments of customers and applications.

• a. Price tactics
• b. Price policy
• c. Price structure
• d. Price strategy

10/When a firm would like to create policies for transitioning from low one-off pricing to the regular one, managers should use ________________technique to estimate how much of the price variation is illegitimate, both on an aggregate and a per account basis.

• a. Offer banding
• b. Discount banding
• c. Price banding
• d. Cost banding