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