BA 303 FINAL EXAM QUESTIONS WITH VERIFIED SOLUTIONS GRADED A+
Intensive distribution - Answers no restrictions as to who can be a channel member
Selective distribution - Answers intermediaries are screened to eliminate some according to
prevailing criteria
Exclusive distribution - Answers highly restrictive with only a limited number of qualified
intermediaries
MSRP - Answers manufacturer's suggested retail price
Private warehouse - Answers company owns itself
Public warehouse - Answers someone else owns it and delivers product
Just in time inventory - Answers not a lot of stock or extra product, delivery within 24 hour
period
Never-out product - Answers product that you NEVER want to run out
Reservation price - Answers what you think is an acceptable price; cause the least friction and
make the most profit
Zone of tolerance - Answers appropriate price that is in the range or neutral
Price sensitivity - Answers degree of responsiveness that customers exhibit to changes in price
Economical customers - Answers extremely price sensitive, value-oriented
Personalizing customers - Answers somewhat price sensitive, other things are important
(atmosphere, employees)
Ethical customers - Answers price is not that important, want to feel good about themselves
Apathetic customers - Answers oblivious to price
Horizontal price fixing - Answers price collusion, illegal, get with competitors and set prices
together
Vertical price fixing - Answers MSRP, can be legal and illegal
Predatory pricing - Answers business will set really low price to drive out competitors and then
raise prices after they are gone, handled on state level
Price discrimination - Answers can't discriminate against customers
Keystoning or keystone markup - Answers standard markup, not too high and not too low
, common in the clothing industry
Discounting - Answers could price below normal using lower margins to get more product sold
Off-price retailing - Answers take advantage of what is out there and markup
Macys --> TJ Maxx
Price skimming - Answers purposely price a product really high
kids at lemonade stand sell $5 a glass
Price penetration - Answers Nylon stockings used to be expensive then brought the price down
to flood the market
Pioneer pricing - Answers brand new price and product
Clean shower
Odd number vs. even number - Answers people tend to equate odd numbers with bargains and
value
Prestige pricing - Answers appropriate for some businesses
Joy perfume sells for $589 an oz.
Price lining - Answers eliminating prices to cut down on confusion
department stores do this a lot
Leader pricing - Answers pick and item/group of items that is popular and run very low pricing
Walmart baby diapers in the back of the store
Special event pricing - Answers Black Friday will have bargains
Bait and switch tactics - Answers bait you with a great offer then trick you into buying
something better
TV set on sale and convince you to buy the more expensive one
Cost-plus or markup - Answers base retail price on cost of item
restaurant businesses
Breakeven - Answers base decisions on how much the cost of the item
Perceived-value pricing - Answers base decisions on what you think you can sell your product
for, not based on cost
Intensive distribution - Answers no restrictions as to who can be a channel member
Selective distribution - Answers intermediaries are screened to eliminate some according to
prevailing criteria
Exclusive distribution - Answers highly restrictive with only a limited number of qualified
intermediaries
MSRP - Answers manufacturer's suggested retail price
Private warehouse - Answers company owns itself
Public warehouse - Answers someone else owns it and delivers product
Just in time inventory - Answers not a lot of stock or extra product, delivery within 24 hour
period
Never-out product - Answers product that you NEVER want to run out
Reservation price - Answers what you think is an acceptable price; cause the least friction and
make the most profit
Zone of tolerance - Answers appropriate price that is in the range or neutral
Price sensitivity - Answers degree of responsiveness that customers exhibit to changes in price
Economical customers - Answers extremely price sensitive, value-oriented
Personalizing customers - Answers somewhat price sensitive, other things are important
(atmosphere, employees)
Ethical customers - Answers price is not that important, want to feel good about themselves
Apathetic customers - Answers oblivious to price
Horizontal price fixing - Answers price collusion, illegal, get with competitors and set prices
together
Vertical price fixing - Answers MSRP, can be legal and illegal
Predatory pricing - Answers business will set really low price to drive out competitors and then
raise prices after they are gone, handled on state level
Price discrimination - Answers can't discriminate against customers
Keystoning or keystone markup - Answers standard markup, not too high and not too low
, common in the clothing industry
Discounting - Answers could price below normal using lower margins to get more product sold
Off-price retailing - Answers take advantage of what is out there and markup
Macys --> TJ Maxx
Price skimming - Answers purposely price a product really high
kids at lemonade stand sell $5 a glass
Price penetration - Answers Nylon stockings used to be expensive then brought the price down
to flood the market
Pioneer pricing - Answers brand new price and product
Clean shower
Odd number vs. even number - Answers people tend to equate odd numbers with bargains and
value
Prestige pricing - Answers appropriate for some businesses
Joy perfume sells for $589 an oz.
Price lining - Answers eliminating prices to cut down on confusion
department stores do this a lot
Leader pricing - Answers pick and item/group of items that is popular and run very low pricing
Walmart baby diapers in the back of the store
Special event pricing - Answers Black Friday will have bargains
Bait and switch tactics - Answers bait you with a great offer then trick you into buying
something better
TV set on sale and convince you to buy the more expensive one
Cost-plus or markup - Answers base retail price on cost of item
restaurant businesses
Breakeven - Answers base decisions on how much the cost of the item
Perceived-value pricing - Answers base decisions on what you think you can sell your product
for, not based on cost
