Page 386 387 learning objective 1 205 what is the

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Page: 386-387 Learning Objective: 1 205. What is the difference between a one-price policy and a flexible-price policy? Ans: a one-price policy is setting one price for all buyers of a product or service. In contrast, a flexible-price policy involves setting different prices for products and services depending on individual buyers and purchase situations. A flexible-price policy gives sellers considerable discretion in setting the final price in light of demand, cost and competitive factors. Page: 388-389 Learning Objective: 2 206. What are discounts? List the four kinds that are especially important in marketing pricing strategy. Ans: discounts are reductions from list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller. Four kinds of discounts are especially important in marketing strategy. They are: (1) quantity discounts (2) seasonal discounts (3) trade (functional) discounts (4) cash discounts. Page: 391 Learning Objective: 3 207. What is the difference between noncumulative and cumulative quantity discounts? Ans: Noncumulative quantity discounts are based on the size of an individual purchase order. They encourage large individual purchase orders, not a series of orders. Cumulative quantity discounts apply to the accumulation of purchases of a product over a given time period, typically a year. They encourage repeat buying (loyalty) by a single customer. - 60 -
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Chapter 14: Marketing Page: 392 Learning Objective: 3 208. What are the two general methods for quoting prices related to transportation costs? Explain how each is used. Ans: The two general methods for quoting prices related to transportation costs are: FOB origin pricing and uniform delivered pricing. FOB means "free on board" some vehicle at some location, which means the seller pays the cost of loading the product onto the vehicle that is used (such as a barge, railroad car or truck). FOB origin pricing usually involves the seller naming the location of the loading as the seller's factory or warehouse. When a uniform delivered pricing method is used, the price the seller quotes includes all transportation costs. The four kinds of delivered pricing methods are: -single-zone pricing -multiple-zone pricing -FOB with freight allowed pricing -basing-point pricing. Page: 394-395 Learning Objective: 3 209. (p. 395) Define the four kinds of uniform delivered pricing methods and give an example of the use of each.
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