Chapter 11 - Marketing

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What are the conditions favoring the use of penetration pricing?

1) Many segments of the market or price sensitive 2) A lower initial price just gorgeous competitors from entering the market 3) Unit production and marketing cost for dramatically as production volume increase

When is skimming pricing an effective strategy?

1) enough prospect customers are willing to buy the product immediately at a high initial price 2) make the sales profitable to the high initial price will not attract competitors 3) lowering the price has only minor effects on increasing the sales volume and reducing the unit cost and 4 ) customers interpret the high price as signal of high-quality

Describe the steps taken in setting a final price

Freak on a stats marketing managers often use instead and a final price are 1) select an approximate price as a starting point 2) set the list or quoted price choose between a one price policy or flexible price policy 3) modify the list or quoted price by considering discounts and allowances

What is predatory pricing?

The pricing of a product below cost with the intent to drive competitors out of the market

What is deceptive pricing provide an example

Price does that mislead consumers fall into a category of deceptive pricing and example of this would be a bait and switch

What is the difference between pricing objectives and pricing constraints

Pricing objectives specify the role of price in organizations marketing and strategic plans. Pricing constraints are factors that limit the range of prices a firm may set

List Four of the demand-oriented Approaches to selecting an approximate price level and define what they are

Skimming pricing: Setting the highest initial price that customers really desiring the product are willing to pay Penetration pricing: setting a low initial price on a new product to appeal immediately to the mass-market. this is the exact opposite of skimming pricing Prestige pricing: Involves setting A high price so that quality or status conscientious consumers will be attracted to the product and buy it Odd-even pricing: involves setting prices a few dollars or cents under an even number for example $1299 $.99 Bundle pricing: the marketing of two or more products in a single package price

What is a loss leader pricing and why do retailers use it?

Special promotion retails delivery so a product below it's customary price to attract attention to it purpose of loss leader pricing is not to increase sales but to try customers and hope they will buy other products as well particularly the discretionary items with large mark ups

Explain why odd- even price may be successful

This strategyMakes the consumer think at a lower price or better deal rather than a full price or higher deal


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