Chapter 15 Continuation of the Pricing Concepts

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Chapter 15Continuation of the Pricing Concepts
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Reductions From List Price
Cash Discounts

• Cash discount price reduction offered to a
  consumer, industrial user, or marketing
  intermediary in return for prompt payment of a
  bill.
• 2/10 NET 30 means 2 discount off invoice if paid
  within 10 days else due in 30 days

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Reductions From List Price
Cash Discounts

• Trade Discounts payment to a channel member or
  buyer for performing marketing functions

Trade Discounts
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Reductions From List Price
Cash Discounts

• Quantity discount price reduction granted for a
  large-volume purchase

Trade Discounts
Quantity Discounts
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Geographic Pricing

• FOB (free on board) Origin
• FOB (Origin allowed), Freight Absorption Pricing
• Uniform-delivered price Postage-stamp pricing
• Zone pricing
• Basing-point system

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Zone Pricing
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Pricing for Organizational Markets

• Basing-Point Pricing

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Sales promotions can be viewed as short-term
incentives to motivate consumers to buy!
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Sales Promotion
Increase trial Encourage repurchase Encourage
brand switching
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Tools for Consumer Sales Promotion
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Sales Promotion Methods for Consumers

• Coupons Discounts on the purchase price of a
  good or service

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Sales Promotion Methods for Consumers

• Money Refunds and Rebates
• Cash back when offered proof of purchase

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Sales Promotion Methods for Consumers

• Premiums Items given free or at a reduced cost

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Sales Promotion Methods for Consumers

• Loyalty Programs
• Reward regular customers

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Contests
During the annual search, which includes both the
U.S. and Canada, the grandchildren, children,
spouses and friends of outstanding grandmas are
invited to write in and tell us, in 100 words
or less, why their grandmas are the greatest.
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Sweepstakes

• Consumer Sweepstakes - Chance

Universal Studios Hollywood
Terminator 23D Sweepstakes OFFICIAL GIVEAWAY
RULES NO PURCHASE NECESSARY
ENTRY To enter the Universal Studios
Hollywood Terminator 23D Sweepstakes, register
your name and information (no password
required). Completed entries must be received
by 1159pm PST on June 1, 2005 to be eligible
for the Grand Prize.
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Trade Discounts

• Trade allowances Trade discounts / Quantity
  discounts
• Push Money a.k.a. SPIFFS Employee sales
  incentive - push Money is a cash premium, prize,
  or additional commission for pushing or
  increasing sales of a particular item or type of
  merchandise given to employees.

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Announcements

• Scores for Extra Credit 2 will be posted by
  this weekend (11/26).
• The last set of four quizzes expire on 11/30 at 5
  p.m. Please complete these quizzes.
• Exam 3 will be held on 11/30. The review
  sheets are posted on the class website.

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Announcements

• You MUST take the exam at the campus that youre
  registered at.
• Students registered at the area campuses will
  take the exams at 6 p.m at the computer labs of
  the area campuses at which youre registered at.
• If youre a main campus student please signup for
  the exam ASAP _at_ http//www.bus.ucf.edu/echambadi/m
  ar3023
• Please sign up using your NID (the one you use to
  log into webct).
• Signups WILL close at 1159pm the day prior to
  the test date. Please hurry and signup ASAP.

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Exam 3

• Main campus students will take the exam at the
  testing lab located in the first floor of CBA II.
  
• For main campus students, well have three time
  slots.
• 500 615 p.m.
• 630 745 p.m.
• 800 915 p.m.

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Makeup Exam

• If you miss one of the following exams Exam 1,
  Exam 2, or Exam 3 you can take a makeup exam on
  7/12.
• The signup sheets for the main campus students
  will be posted on 2/12.
• Area campus students will take the makeup exam in
  the area campuses at 7 p.m. on 7/12.
• Format will be the same as the regularly
  scheduled exams.

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Testing Procedures for the CBA

• Bring your ID (MUST!) UCF student ID preferred
  or drivers license.
• Arrive at the test site 10 minutes before the
  exam time so that your IDs can be checked.
• Do not arrive late. Students will not be allowed
  to enter the Testing Lab 10 minutes after the
  test has begun.
• Well provide blank sheets if you need to think
  through using paper.
• Bring a calculator.

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Announcements (contd.,)

• Exam will comprise of material from chapters 9,
  10, 11, 12, 13, 15 Supplementary chapter.
• The amount of material is comparable to the
  material from the first test.
• 55 questions in the third exam.
• 30 definitional 70 applied questions

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Breakdown by Chapter

• Chapter 9 - 5 questions
• Chapter 10 - 9 questions
• Chapter 11 - 9 questions
• Chapter 12 - 9 questions
• Chapter 13 - 9 questions
• Chapter 15 - 10 questions
• Supplementary Chapter 4 questions

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Difficult Concepts Ch. 9

• Discontinuous and incremental (continuous)
  innovations
• Steps in the NPD process
• Diffusion Adopter categories
• PLC issues

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Difficult Concepts Ch. 10

• Types of functions performed by intermediaries.
• Transactional
• Logistical
• Facilitating
• Levels of distribution intensity
• Channel conflict
• Push vs. Pull

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• The most restrictive form of market coverage,
  _____ distribution, entails establishing only one
  or a few dealers within a given geographic area.
  Because buyers need to be willing to search or
  travel to acquire the product, this form of
  distribution is limited to consumer specialty
  goods, a few shopping goods, and major industrial
  equipment.
• a. selective
• b. intensive
• c. exclusive
• d. dual
• e. transactional

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Difficult Concepts Ch. 11

• Specialty stores
• Waves in retailing
• Wheels of retailing
• Types of retail stores
• Markup and markdown in pricing

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• Of the following types of stores, which pair can
  be described as having low levels of service,
  broad product assortments, and low gross margins?
• a. supermarket and warehouse club
• b. discount specialty and full-line specialty
• c. department store and specialty store
• d. warehouse club and discount specialty
• e. off-price retailer and convenience store

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Difficult Concepts Ch. 12

• The communication process
• The various components
• AIDA concept

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Difficult Concepts Ch. 13

• Major types of advertising
• Campaign, Appeal, and an USP
• Advantages and Disadvantages of various media
  newspapers, TV, radio, and magazines
• Sales promotions different types of sales
  promotions

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• Pepsi's advertising campaign that depicts people
  who mistakenly drink the other brands as suddenly
  living a boring lifestyle, acting "square," or
  singing mellow, old songs, is an example of _____
  advertising.
• a. competitive
• b. institutional
• c. comparative
• d. publicity
• e. pioneering

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Difficult Concepts Ch. 15

• Elasticity of demand
• Breakeven analysis
• Different types of discounts from the PPT slides
• Geographic pricing

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Supplementary Chapter

• Follow the definitions from the PPT slides.
• BCG matrix or Growth-share matrix.

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Computations

• There will be a few questions that will involve
  computations. So bring a calculator.