3250 Ch. 11 ?s
Companies that set a low initial price in order to attract a large number of buyers quickly and win a large market share are employing a ________ pricing strategy.
market-penetration market-penetration pricing, companies set a low initial price to penetrate the market quickly and deeply in order to attract a large number of buyers quickly and win a large market share. The high sales volume results in falling costs, allowing companies to cut prices even further.
When a phone company releases its greatly anticipated new phone models at a premium price, only to discount them slowly over time, this is an example of a ________ pricing strategy.
market-skimming "market-skimming" refers to a pricing strategy by which makers of new products set high initial prices in order to skim revenues layer by layer from the market.
Combo meals at fast-food restaurants are an example of ________ pricing.
product bundle
________ pricing is an appropriate strategy for companies that offer multiple products within a given category with varying levels of quality or functionality.
product line product-line pricing, management must determine the price steps to set between the various products in a line.
A grocery store places its store brand picante salsa, priced at $2.49, directly next to bottles of national brand Pace picante salsa, priced at $3.19. In so doing, the store is encouraging the use of the higher priced item as a ________ price.
reference Reference prices are prices that buyers carry in their minds and refer to when looking at a given product. The reference price might be formed by noting current prices, remembering past prices, or assessing the buying situation. For example, a grocery retailer might place its store brand of bran flakes and raisins cereal priced at $2.49 next to Kellogg's Raisin Bran priced at $3.79.