1. McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

2. FIGURE 14-1 FIGURE 14-1 The six steps in setting price. The first three steps were covered in Chapter 13 and the last three steps in Chapter 14. 14-2

3. FIGURE 14-2 FIGURE 14-2 Four approaches for selecting an approximate price level 14-3

4. FIGURE 14-6 FIGURE 14-6 Three special adjustments to list or quoted price include discounts, allowances, and geographical adjustments 14-4

5. STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE DISCOUNTS LO3  Discounts  Quantity Discounts Quantity Discounts  Seasonal Discounts Noncumulative Quantity Discounts Cumulative Quantity Discounts 14-5

6. STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE DISCOUNTS LO3  Trade (Functional) Discounts  Cash Discounts 14-6

7. STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE ALLOWANCES LO3  Allowances Trade-In Allowances Promotional Allowances  Everyday Low Pricing (EDLP) Everyday Low Pricing (EDLP) 14-7

8. STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE GEOGRAPHICAL ADJUSTMENTS LO3  FOB Origin Pricing FOB Origin Pricing  Uniform Delivered Pricing Uniform Delivered Pricing Single-Zone Pricing Multiple-Zone Pricing FOB with Freight-Allowed Pricing Basing-Point Pricing 14-8

9. FIGURE 14-8 FIGURE 14-8 Several pricing practices are affected by legal and regulatory restrictions, which benefit both consumers and firms 14-9

10. STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE LEGAL & REGULATORY ASPECTS OF PRICING LO4  Price Fixing Price Fixing Horizontal Price Fixing Vertical Price Fixing Rule of Reason  Resale Price Maintenance 14-10

11. STEP 6: MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE LEGAL & REGULATORY ASPECTS OF PRICING LO4  Price Discrimination Price Discrimination  Deceptive Pricing  Geographical Pricing  Predatory Pricing Predatory Pricing 14-11

12. FIGURE 14-9 FIGURE 14-9 Five most common deceptive pricing practices 14-12