One common means by which time of purchase is used as a price-segmentation fence is by offering items at recurring discounts that are more or less predictable over time.

(a)  

Sellers often set lower prices for brief, irregularly occurring time periods in order to communicate to customers and potential customers information about the existence of products and the benefits of these products. Because marketing communication is known as “promotion,” these temporary low prices are termed (a)   .

When promotional discounts are simple price decreases, they are often referred to as “sales.” Cents-off coupons and rebate offers are slightly more complicated forms of promotional discounts. Promotional discounts to product resellers, such as wholesalers and retailers (i.e., “the trade”), are examples of what are known as (a)   .

Desires to communicate an (a)   to the receiver, in this case the customer or potential customer. A temporary low price can provide a means for this communication by leading the receiver to take a target action that will have the effect of getting across the intended message.

When Fuji wanted to communicate that its 35mm film was equal in quality to the accepted market leader, Kodak, it offered generous promotional discounts to encourage _. Fuji’s management calculated that once consumers tried Fuji film, they would see for themselves that it worked as well as Kodak film. By means of this discount-induced trial, the intended message would be communicated.

(a)  

The target action could also be the consumer’s purchase of more units of a product than usual. This action is often referred to as (a)   .

A discount for early purchase, also known as an_ (a)   , is often used in the pricing of service products.

An (a)   is a graph showing the cumulative number of purchases of a service product as a function of the amount of time before the service is performed.

Just as early purchase can be used as a price-segmentation fence, so can purchasing a produc later than other customers. For example, airlines have long offered deep discounts, known as _ (a)   , to travelers who can delay their purchase of a ticket until just before the flight takes off.

(a)   are decreases in the price of a retail item that occur after the item has been carried by the store for a certain period of time.

If the retailer’s pricing is guided by gross margins, then the retailer would calculate an (a)   that is large enough so that, after markdown reductions, the final gross margin achieved will be in line with the retailer’s profit goals.

If the retailer’s pricing is guided by gross margins, then the retailer would calculate an initial gross margin that is large enough so that, after markdown reductions, the final gross margin achieved will be in line with the retailer’s profit goals. This final gross margin will be referred to as the (a)   .

Because it begins with a high price to a small segment of the market, like the skimming strategy discussed in Chapter 4, this pricing technique is often known as (a)   . It is particularly appropriate when most customers purchase the product only once (or at least at very long interpurchase intervals) and when the product has some degree of protection against direct competition.

In (a)   , the price that the seller quotes to the customer includes the

transportation of the product to the customer’s location. It gives the seller a greater degree of

pricing control. As we will see, the bundling of a product’s shipping along with the product can provide the

product’s producer with an additional means of managing the price that the customer pays for the product.

There are a number of alternative formats for communicating a delivered price. The issue of price partitioning, mentioned in Chapter 1 and discussed further in Chapters 7 and 8, comes up again here. If the seller chooses to quote a single product price that includes shipping, then the seller would indicate that this price is (a)   .

In (a)   the freight charges quoted to the buyer are the costs of shipping the product from a place other than the producer’s location.

When delivered prices are set so as to absorb at least some of the shipping costs, it is referred to as (a)   .

Some companies accomplish this price segmentation between different geographic areas by the bundling fence alone. They will include shipping in the product’s price and charge the same price—a (a)   price—to all customers, regardless of location.

Geographic price segmentation in retailing is called (a)   (also called variable pricing or local pricing). The management of a chain of retail outlets will classify the chain’s outlets into zones based on their location.

The use of price zones greatly increases the complexity of pricing databases and other systems needed to manage prices across a retail chain. Managing price zones can be particularly costly in product categories such as clothing, where prices are marked on each item.

(a)  

Displaying prices on Internet sites also presents a problem for zone pricing. This not only increases consumer awareness of zone pricing but also undermines it unless the online price is as high as that in any of the zones.

(a)  

Large metropolitan newspapers have accommodated the retailers using zone pricing by printing separate editions for different areas of the newspaper’s readership and by putting price advertising in separate sheets known as (a)   .

Displaying prices on Internet sites also presents a problem for zone pricing. This not only increases consumer awareness of zone pricing but also undermines it unless the online price is as high as that in any of the zones.

(a)  

Consumer (a)   —a combination of their income and wealth— differs greatly between countries.

There are several factors that constrain a seller’s use of country of purchase as a price-segmentation fence. The first is the possibility of (a)   .

The term (a)   refers to commerce that is illegal. Gray market commerce is not illegal in most countries but is unauthorized and ethically questionable.

Hermann Simon and his colleagues have used the judgments of experienced managers to estimate the specifics of the relationship between the price differential between two countries and the proportion of gray imports in the more expensive country. This type of research has indicated that gray importing will often disappear completely when price differentials are less than 20 percent (of the upper price). It has led Simon and his colleagues to recommend that managers reduce prices in high-priced countries and raise prices in low-priced countries so as to keep the price differentials for a product close to being within this 20 percent range. They termed this price range a (a)   .

One type of government action consists of price controls, the government mandating of maximum prices. It could cover all products, such as those imposed by the Brazilian government during its period of excessive inflation, or could be more selective, covering only.

(a)  

A country’s government may also impose (a)   . These are schedules of import taxes, known as duties, that are designed to protect the local sellers of a product against low-priced competition from foreign producers.

Protective tariff duties have declined considerably due to wide international acceptance of the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO). However, in recent years, there has also been a rise in actions to counter what has been termed (a)   .

A (a)   is the Internet location of a product’s manufacturer (e.g., Sony.com) or of an online retailer (e.g., Amazon.com).

(a)   an item’s price affects the sales levels of other items by influencing the consumer’s perception of the seller’s other prices.

(a)   an item’s price affects the sales levels of related items by affecting its own sales.

Some sellers try to maintain an overall high-price image in order to help communicate high product quality and to encourage the sense that owning their products is a sign of affluence and good taste. This practice is known as (a)   .

It has also been found that not all items are equal in contributing to a retailer’s price image.8 Items that are particularly powerful in influencing a retailer’s price image are known as (a)  

When a change in the sales level of one item causes the sales level of another item to change in the opposite direction, then the two items are referred to as (a)   .

When a change in the sales level of one item causes the sales level of another item to change in the same direction, then the two items are referred to as (a)   .

This ability of complements to help make a price decrease profitable leads many sellers to offer (a)   .

For example, if first-time car buyers, who often purchase small cars, are likely to purchase larger cars from the same company in subsequent years, then these larger cars could be considered complements of the company’s small cars.

(a)