Marketing ch 19 and 20

The manager at Target puts a sign up next to a Samsung audio system that reads, "Only $299.99! $60 less than at Best Buy." This is an example of what type of pricing strategy?

Comparison discounting

For custom-made equipment or commercial construction projects, which pricing method is most likely used?

Cost-plus

Which of the following is not a method used to determine transfer prices?

Discounted standard cost

If a retailer orders a quantity of merchandise to be delivered to his store in Phoenix and is quoted a price that does not include shipping charges, the retailer is paying a(n) _________ price.

F.O.B. factory

Under Armour is establishing a ___________ pricing objective to maintain or increase its product's sales in relation to total industry sales.

Market share

What type of pricing objective would an organization use if it were in a favorable position and desired nothing more?

Status quo

At what point does a firm maximize profit?

The point at which marginal cost equals marginal revenue

In conducting an assessment of her accounting firm, Paige discovers the following annual results: average charge per customer = $250; rent = $12,000; total billings = $150,000; employee compensation and benefits = $60,000; and other costs = $110,000. Given these results, Paige's profits would equal

a loss of $32,000.

Odd-even pricing is

a psychological pricing strategy.

Lucy buys a new dress at T. J. Maxx that has a price tag with "Compare at $150. Our Price is $89.99." This is an example of the use of

an external reference price

The oldest form of exchange is known as

barter

Jared is developing a business plan for a new type of bicycle helmet. He is interested in finding the point at which the costs of producing the helmet will equal the revenue earned from selling the product. Jared is interested in finding the

break even point

Some grocery stores collect data on competitive prices

by using full-time comparison shoppers.

Pricing the basic product in a product line low while pricing related items at a higher level is called

captive pricing.

If local Shell gasoline stations look at BP stations' prices as the primary method of determining its own prices, Shell is using __________

competition-based pricing, which considers costs to be less important than competitor's prices.

The three primary bases for developing prices are

demand, competition, and cost.

If a product is priced based on how many or how few people want it at a particular time and place, __________ pricing is being used.

demand-based

When establishing prices, a marketer's first step is to

develop pricing objectives.

The fact that senior citizens are charged a lower price at movie theaters than younger adults is an example of ___________ pricing.

differential

For most firms in the United States, demand curves are

downward sloping

Mars Petcare is one of the world's largest pet food manufacturers. If the strategic goal for Mars Petcare in the coming year was to _____________ in North America, it should use temporary price reductions.

gain market share

If the terms of a business exchange are 2/10 net 30, this means that the transaction

involves a cash discount if paid within ten days

A product is a price leader when

it is sold at less than cost in the hope that sales of other products will increase.

Wet Seal, a retailer of swimwear, employs a commonly used cost-based pricing method called

markup pricing

If Nabisco wants to quickly gain a large market share with its new line of reduced-fat snack crackers, it should use

penetration pricing.

French Quarter Inns drops the price of a suite from $225 to $195 per night and experiences a reduction in the quantity of rooms demanded of an average of five per night. This is an indication that suites at this hotel are apparently an example of a(n) ________ product.

prestige

For most consumers, there is an assumed relationship between

price and quality

A measure of sensitivity of demand in relation to changes in price is

price elasticity of demand.

The newest version of a product like Bose headphones is likely to use __________ , while the new version of Red Bull is likely to use ___________ .

price skimming; penetration pricing.

Advertisements for Suave shampoos emphasize that other shampoos may cost more but don't work any better than Suave. In this example, Suave is competing on the basis of

product price

The pricing of Clinique makeup considerably higher than brands such as Cover Girl, Revlon, and Maybelline is used to communicate ___________ , which is the company's primary pricing objective.

product quality

Services that are performed by lawyers, dentists, or doctors are typically priced using _________ ; sometimes these prices are not based on the amount of time that is spent in each situation, but are based on a flat fee regardless of the difficulty involved.

professional pricing

If Ralph Lauren offers to reduce the price of its women's blazers when retailers buy more than 100 pieces, the designer is offering a ___________ discount.

quantity

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

random discounting

Markup is measured either as a percentage of _________ or a percentage of ________ .

selling price; cost

Monopolies usually keep their prices at a level that generate a reasonable, but not excessive, return primarily because

they want to avoid government regulations on their pricing.

Suppose that the frozen foods division of Swanson purchases food trays and boxes from the packaging division. The form of pricing used to charge the frozen foods division is called

transfer pricing

Suppose Tommy Hilfiger is introducing a new line of men's ties. The designer believes that the target market for these ties comprises men who are very status-conscious. In keeping with this assessment, department stores selling the ties should

use price symbolically

the Palasi Candy Company is a small business located in the northeastern united States. The owner of Palasi Candy is calculating the projected costs for the coming year. There is rent for the building, salaries for the retail employees, raw materials of sugar, chocolate, and other ingredients, wrappers for packaging of individual pieces of candy, boxes, and radio advertising. Palasi's ____________ are most likely to be the raw materials of sugar, chocolate, and other ingredients, as well as the wrappers.

variable costs.

The amount of profit a channel member expects depends on

what the intermediary could earn if it were handling a competing product instead.