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Social networking websites used to promote products/services. Chapter 17 Learning Objective 2: Tools for consumer sales promotion oCoupons and rebates oCoupon is a certificate that entitles consumers to an immediate price reductionwhen they buy the product. oPremium: an extra item offered to the consumer, usually in exchange for some proof that the promoted product has been purchased. oReinforce consumers decision ex Happy Meal includes a toy oLoyalty marketing programs: reward loyal customers for making multiple purchases ex Wal-Mart card. oSampling allows the customer to try a product or service for free, ex Netflix 30 day trial. oPoint-of-purchase: promotion includes any promotional display set up at the retailer'slocation to build traffic, advertise the product, or induce impulse buyingChapter 19 Learning objective 2: The legality and ethics of price strategy oDeceptive pricing: refers to promoting a price or price saving that is not actually available. It occurs when the seller leads the purchaser to believe that he or she can or is receiving the good or service at the promoted or reduced priceoPrice fixing: occurs when two or more companies conspire to set the prices for their products or servicesoPredatory pricing: occurs when a company sets its prices very low with the intention of driving its competition out of either the market or the business. To do this, the company lowers its price below its average variable cost for an extended period of time—more time than is typical of any short-term loss leader that might be used to attract business or move excess inventoryoResale price maintenance: producers' attempts to control the price of their products in retail stores, is illegal. However, companies operating both in Canada and in the United States will find that resale price maintenance is legal south of the border, and, thus, such firms may need two separate pricing policies
oPrice discrimination is the practice of charging different prices to different buyers for goods of like grade and quality within relatively the same time period for the purpose of substantially reducing the competitionoSix elements are necessary for a practice of price discrimination to occur:o1.Two or three instances of discrimination must have occurred over time.o2.The sales in question must have occurred within a relatively short period of time.o3.The products sold must be commodities or tangible goods.o4.The seller must charge different prices to two or more buyers for the same product.o5.The products sold must be of the same quality and grade.o6.The buyers of the good must be competitors.