MKT 210 Ch. 11

When would a competitor most likely react to a firm's price change?

When the number of firms involved is small

One form of ___________ is when movie theaters charge one price for adults and a different price for senior citizens.

customer-segment pricing

Basic price adjustments known as ___________ are used to reward customers for certain responses.

discounts and allowances

Companies that use _____________ continually adjust prices to meet the characteristics and needs of individual customers and situations.

dynamic pricing

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.

optional-product

The Ford Mustang is offered in several different models. Ford will use ___________ pricing to determine the price steps between the different models.

product line

Many personal care companies combine toothpaste with a toothbrush at a reduced price. This is an example of __________ pricing.

product-bundle

In _____________ pricing, the company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs.

segmented

Cheese makers in Wisconsin sell their leftover brine to local city and county highway departments, which use it in conjunction with salt to melt icy roads. Which product mix pricing strategy does this represent?

By-product pricing

_____________ occurs when retailers set an artificially high "regular price" and then advertise a "sale price," which is actually close to their everyday price.

Deceptive pricing

Which of the following statements is true concerning new product pricing strategies?

For a market-skimming strategy to be successful, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more.

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?

Market-penetration pricing

_____________ is the practice of pricing products below cost to harm competitors.

Predatory pricing

What is predatory pricing?

Selling below cost with the intention of punishing a competitor

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Because she does not know much about wine, she will likely use the price of the wines as ____________.

an indicator of quality

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.

captive-product

When Apple introduced its iPhone, it priced the new product at $599, considerably higher than either its iPod or competing cellular phones. Apple Computer was pursuing a(n) ______________ new product pricing strategy.

market-skimming

Archer Daniels Midland Co is the world's largest processor of soybeans, corn, and wheat. In the 1990s, the Justice Department found it guilty of regularly meeting with competitors when setting prices. ADM was guilty of ____________.

price-fixing

A soda pop company offers a discount to a grocer. In exchange, the grocer agrees to provide in-store advertising for the soda pop and additional sales-support. This is an example of _______________.

promotional allowances

Some sellers use 00-cent endings on regularly priced items and 99-cent endings on discount merchandise. This is an example of pricing referred to as ______________.

psychological pricing