mar chap9
zone pricing
A geographical pricing strategy in which the company sets up two or more zones. All customers within a zone pay the same total price; the more distant the zone, the higher the price; UPS charges different prices for shipping depending on an item's destination. The more distant the city the package is being shipped to, the higher the price UPS charges. Which geographic pricing method is UPS using?
promotional
A retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store. This is an example of _________ pricing.
the company's overall marketing strategy, objectives, and marketing mix
Internal factors that affect pricing include ________.
win a large market share
One major objective associated with a market-penetration pricing strategy is to ________.
Each seller is alert and responsive to competitors' pricing strategies and marketing moves
Which of the following statements is true regarding oligopolistic competition?
product line
a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges; The Ford Mustang is offered in several different models. Ford will use __________ pricing to determine the price steps between the different models.
reduce price
make a price lower; Which of the following is a potentially effective action a company could take in response to a competitor's price cut?
optional-product
pricing optional or accessory products sold with the main product; A car buyer can choose a base model at one price, or one with a premium sound and navigation system at a higher price. This is an example of _______ pricing.
Customer value-based pricing
refers to setting price based on buyers' perception of value rather than on the seller's cost.
captive-product
sets price for main product low, but sets a high price for the accessories; Gillette charges a fairly low price for its razors (relative to costs) and a high price for razor blades. It is using a strategy of ___________ pricing.
breakeven pricing
the price at which total costs are equal to total revenue and there is no profit; Which of the following is a cost-oriented pricing approach?
an indicator of quality
Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as ________.
if demand is elastic, sellers will consider lowering their price
Which of the following is true regarding the price-demand relationship?
Cutting prices in an industry loaded with excess capacity may lead to price wars.
Which of the following statements is true regarding initiating price cuts?
Wherever possible, the company should consider ways to meet higher costs or demand without raising prices.
Which of the following statements is true regarding initiating price increases?
location-based pricing
a company charges different prices for different locations, even though the cost of offering each location is the same; Many state colleges and universities charge one price for in-state students and a higher price for out-of-state students. Which form of segmented pricing are these schools using?
dynamic pricing
adjusting prices continually to meet the characteristics and needs of individual customers and situations; Companies that use ________ continually adjust prices to meet the characteristics and needs of individual customers and situations.
price fixing
an agreement between two or more firms on the price they will charge for a product; Over the years, U.S. air carriers have been accused numerous times of collusion when setting prices. This illegal practice is called _______.
value-added pricing
attaching value-added features and services to differentiate a company's offers and charging higher prices; New, premium movie theaters offer features such as online reserved seating, high-backed leather executive chairs with armrests and footrests, the latest in digital sound, super-wide screens, and other amenities for which they charge a higher price. This is an example of which type of pricing?
target costing
designing a product so that it satisfies customers and meets the profit margins desired by the firm; Geared2Beer, a craft beer brand, identifies a market segment that is willing to pay premium prices for its craft beer, and Geared2Beer managers select an ideal selling price. Managers then determine the costs to create craft beer that meets the ideal selling price. The company's pricing approach is referred to as ________.
good-value pricing
offering just the right combination of quality and good service at a fair price; Sadie's Restaurant has listened to its customers over the years and is now able to offer the right combination of quality and good service at a fair price. Which pricing strategy is Sadie's using?
predatory pricing
selling a product below cost to drive competitors out of the market; Selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business is an illegal practice called
market-skimming
setting a high price for a new product when a firm has a unique or highly differentiated product with low price elasticity of demand; When Apple Computer Company introduced its iPhone, its priced the new product at $599, considerably higher than either their iPod or competing cellular phones. Apple Computer was pursuing a ___________________ new product pricing strategy.
market-penetrating pricing
setting a low price for a new product in order to attract a large number of buyers and a large market share; A company has set a low price on a new product it introduced. It wants to maximize its market share and attract a large number of buyers quickly. Which new product pricing strategy should the company use?
product-bundle
the combination of goods and services provided to a customer; Bath & Body Works offers "three-fer" deals on its soaps and lotions (such as three antibacterial soaps for $10). This is an example of _______ pricing