Chapter 10

Which of the following involves introducing less-expensive versions of established, brand name products?

good-value pricing

Department stores such as Kohl's and Macy's practice high-low pricing by ________.

having frequent sale days for store credit-card holders

Although markup pricing, or cost-plus pricing, does not directly respond to demand fluctuations, the method remains popular for which of the following reasons?

it is very easy to calculate price

McDonald's resisted creating a value menu for many years. Finally, in response to Wendy's, Burger King, and Taco Bell, McDonald's began to offer the dollar menu. Which pricing strategy did it employ with the addition of the dollar menu?

Competition-based pricing

For companies such as Walmart or Southwest Airlines, which have worked hard to position themselves as the low-cost producers in their industries, it makes great sense to set prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for the company's effort and risk. This approach is known as ________ pricing strategy.

Cost-based

The simplest pricing method is ________ pricing.

Cost-plus

What is the simplest and most common form of pricing manufacturers and resellers use?

Cost-plus pricing

The ________ shows the number of units the market will buy in a given time period at different prices that might be charged.

Demand curve

In the aftermath of the Great Recession of 2008- 2009, many consumers rethought the price-value equation and became more value conscious. In response, which of the following is a recommended long-term pricing strategy for marketers?

Offer more affordable alternative lines and brands.

________ is typically considered the most flexible of the marketing mix elements.

Price

The term ________ refers to how responsive demand will be to a change in price.

Price elasticity

Even as frugal consumer spending habits linger in the wake of the recession, some movie theater chains are adding amenities, such as upgraded leather seating and seat-side service, and charging more for tickets rather than cutting services to maintain a lower admission price. This example illustrates the concept of ________ pricing strategy.

Value-added

Companies with lower costs ________.

can set lower prices that result in smaller margins but greater sales and profits

The learning curve is representative of the ________.

drop in the average per-unit production cost that comes with accumulated production experience

As a manufacturer increases the price, ________.

the break-even volume drops