Marketing Ch 16
Which of the following possible consumer reference prices is generally unavailable to a consumer?
Actual future price
Which of the following results in a tangible increase in price?
Escalator clauses
Which of the following is one of the questions a company needs to consider in a homogeneous product market?
How can we enhance our augmented product?
When a manufacturer wants to earn a specific percent on sales, what should be determined to calculate the sale price?
Markup price
Which of the following is a true statement about price elasticity?
Price elasticity depends on the magnitude and direction of the contemplated price change.
When are buyers more price sensitive?
When buyers can store the product
Where pricing is a key competitive factor (aerospace, railroads, and oil companies), companies often establish a pricing department to set or assist others in setting appropriate prices. According to research, in B-to-B settings, pricing performance improves under what circumstances?
When pricing functions are spread horizontally across the sales, marketing, and finance units
To protect a company from inflation on contracts for major industrial projects, such as aircraft construction or bridge building, ________ requires the customer to pay today's price and all or part of any inflation increase that takes place before delivery.
an escalator clause
One of the weaknesses of using surveys to estimate the demand curve is ________.
consumers exaggerate their willingness to pay for new products and services
Dollar stores base their strategy around extreme ________, cutting the costs associated with constant sales and promotions and increasing consumer confidence in everyday shelf prices.
everyday low pricing
Jordan pays overhead each month, including her company's bills for rent, heat, interest, and salaries, which are examples of ________.
fixed costs
If a calculator company produces 100,000 hand calculators at a cost of $10, but the cost drops to $9 when it produces 200,000 and $8 when it produces 400,000 hand calculators, the decline in average cost with accumulated product experience is called the ________.
learning curve
The Internet enables sellers to discriminate between buyers, and buyers to discriminate between sellers. One of the ways a seller can use the Internet to discriminate between buyers is by ________.
monitoring customer behavior to tailor offers to individuals
When PepsiCo sold its cola syrup to Russia for rubles and agreed to buy Russian vodka at a certain rate for sale in the United States, it was engaged in the form of countertrade known as a(n) ________.
offset
The first step in setting pricing policy is ________.
selecting the pricing objective
When ConAgra foods decided to cut $250 million in costs to return to a $1 price point (after sales dropped as a result of raising prices $0.25 to cover higher commodity costs), it was using ________.
target costing
Among the best practitioners of ________, or charging a fairly low price for a high-quality offering, are IKEA, Target, and Southwest Airlines.
value pricing
When would pricing cues such as sale signs and prices that end in "9" be less meaningful for consumers?
when consumers are experienced in the category
The three C's model for price setting includes ________.
costs, competitors' prices, and customers' assessments of unique features
When a museum charges a lower admission fee for students and senior citizens, it is engaging in ________ pricing.
customer-segment
When the seller absorbs part or all of the risk of a purchase, in the event the purchase does not deliver the full promised value, what type of pricing is being used?
gain-and-risk-sharing pricing
When Sony introduced the first high-definition television to the Japanese market in 1990, it was priced at $43,000, which is an example of ________ pricing.
market-skimming
Caterpillar uses ________ to set prices on its construction equipment, and justifies a higher price by showing lower lifetime operating costs.
perceived-value pricing
The trap associated with a price-cutting strategy where a higher-priced competitor matches lower prices but has longer staying power because of deeper cash reserves is the ________.
shallow-pockets trap
Back-to-school sales in August are an example of ________.
special-event pricing
