Promotional Pricing & Discount Management Flashcards
7 cards from real CPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Promotional Pricing & Discount Management flashcards as text
A promotional allowance is best described as:
Answer: Compensation given to a reseller for promoting a product locally
Promotional allowances are payments or price reductions provided to channel members in exchange for featuring, displaying, or advertising the supplier's product.
Which of the following best describes 'price discrimination' in a legal and strategic pricing context?
Answer: Charging different customers different prices based on their cost-to-serve or value received
Legal price discrimination involves charging different prices based on legitimate differences in cost-to-serve, competitive conditions, or value delivered to different customer segments.
A 'slotting allowance' is typically associated with:
Answer: Retail shelf space fees paid by manufacturers to retailers
Slotting allowances are fees manufacturers pay to retailers for shelf space, placement, or inclusion in store assortments.
A 'buy-one-get-one' (BOGO) promotion primarily impacts which pricing metric most directly?
Answer: Effective price per unit
A BOGO promotion halves the effective price per unit while keeping the list price unchanged, making the per-unit revenue impact the most direct pricing metric affected.
Which of the following is a key risk of frequent promotional price reductions?
Answer: Customer price anchoring to the promotional price
Repeated promotions can anchor customers' reference prices at the discounted level, making it difficult to sustain full prices and eroding perceived value.
An 'everyday low price' (EDLP) strategy differs from a 'high-low' pricing strategy primarily because EDLP:
Answer: Eliminates promotional price swings in favor of consistently low stable prices
EDLP maintains a stable, consistently low price without periodic promotional highs and lows, reducing price volatility and promotional costs.
When evaluating a promotional pricing event, the 'incremental volume' measure refers to:
Answer: Sales volume above the baseline that would have occurred without the promotion
Incremental volume isolates the additional sales generated by the promotion beyond the baseline, distinguishing true lift from sales that would have occurred anyway.