Terms in this set (41)
The "golden rule" of channel pricing advises channel managers to:
Give explicit consideration to the effect of pricing decisions on channel member behavior.
Gross margins for retailers of __________ are on the average lower than for retailers of ___________.
Gasoline service stations; furniture
A product cost a wholesaler $6.80. The wholesaler sold the product to a retailer for $10.00. The percentage gross profit on the wholesaler's cost is:
The "price" paid to gain channel member support must emphasize:
The job performed by the channel members.
Pricing in the marketing channel can be thought of as analogous to:
Who gets what "piece of the pie".
A customer buying a branded product from a low-priced distributor likely is:
There is no way to tell from the information given.
When channel members load up on discounted products featured in the manufacturer's promotion but pass on the lower price for just a portion of the amount purchased to their customers, they are most likely to be engaged in:
Generally, when manufacturers make major changes in their pricing structure, channel members usually are __________ when manufacturers make major changes in their terms of sale.
as uneasy as
If a product has a list price of $25 and offers a wholesale trade discount of 59% and a retail trade discount of 40%, the cost to the wholesaler is:
___________ are products that usually have the lowest price in the product line and yield low margins.
Which of the following is a false statement about Oxenfeldt's set of eight classic guidelines for developing pricing strategies?
They guarantee results.
If a wholesaler can buy an item for $38 that has a list price of $95, the trade discount percentage available to the wholesaler is:
Which of the following is true regarding manufacturers' attempt to uncover channel members' views on the manufacturer's pricing strategies?
All of the above
Which of the following is most likely to have the effect of moving price points downward for a product category?
Distributors and dealers who offer extremely low prices but little if any service to customers are engaging in a practice called:
Which of the following is not a factor that should normally be included in developing pricing strategies?
Which of the following is not a potential reaction by channel managers to a manufacturer's cut in price?
The price cut may decrease sales volume and profits.
The sale of well-known brand products by unauthorized dealers, usually at very low prices, is referred to as:
The gray market.
Differing perceptions of price incentives between the consumers and channel members' viewpoints stem from:
Differing price elasticities.
A producer may offer a margin different from that offered by competitive brands if:
If the customers associate superior benefits with the product.
Which of the following statement pertaining to "special pricing deals" is false?
Generally special pricing deals enhance brand equity.
Giant retail chains such as Home Depot and Lowe's, demand lower prices from manufacturers because:
They perform many wholesaler functions.
When reviewing the margins offered to different classes of channel members, the channel manager should consider all of the following functions except:
Does the channel member offer guarantees and repair warranties?
Before automatically passing price increases through the channel, the manufacturer should:
Do whatever it can do to mitigate the negative effects of the increase on channel members.
The concept of "buying distribution" refers to:
Paying channel members for services through the margins offered by the manufacturer.
The __________ often causes a problem with price promotions.
differing price elasticities of consumers and retailers
An item cost $20 to produce. The retailer sold the product for $79. It had cost the retailer $50. The wholesaler had paid $34 for the product. The list price of the product was $100. The total of the dollar gross margins received by the manufacturer, wholesaler, and retailer amounts to:
Gross margins of wholesalers range approximately from:
7% to 34%
If a powerful manufacturer, an industry leader with exceptionally strong brand loyalty from final customers, offers channel members margins they perceive to be inadequate, the channel members are likely to do all of the following except:
Immediately drop the product from their product line
Manufacturers are often concerned about their products being involved in the gray market for all of the following reasons except:
Consumers may stop buying the product because of a perceived decrease in value
Of all the elements in the marketing mix, channel members at the wholesale and retail levels view __________ as being most in their domain.
In attempting to gain price control in the channel, the manufacturer should use:
Household appliance retailers earn an average 33.5% gross margin. These retailers might be willing to accept a lower margin on promotional products if:
The channel members are convinced that the promotional products will help build customer patronage.
An item cost a manufacturer $4 to produce. It has a wholesale trade discount of 66% and a retail trade discount of 50%. The list price of the item is $15. Assuming the retailer sold the item for $12, the dollar gross margins received by the manufacturer, wholesaler, and retailer are respectively:
$1.10, $2.40, $4.50
When a channel member makes disparaging remarks about a product in order to sell a competitor's product, the channel member is engaging in:
If an item that had cost the retailer $7 sold at retail for $12.50, the gross margin percentage on selling price is:
A manufacturer may feel it needs to control resale price for all of the following reasons except:
It needs all channel members to perform in a specific manner in order to meet strategic objectives.
Ideally, the channel manager should set the margins offered the channel members:
So that margins would vary in direct proportion to the functions performed by the different classes of channel members.
Are reductions from list price.
For some product categories, customers simply have come to expect finding products priced at customary levels. The "expected" prices for such products are referred to as: