MKTG 3433 - Chapter 11 Assignment
A high-low retailer like Walgreens might temporarily cut the price of Carmex tubes to $0.49, well below its customary price, to attract attention to the product and customers to the store. This temporary price reduction is an example of
loss-leader pricing.
Most new Carmex products are priced between $0.99 and $2.99, well within reach of the price-sensitive mass consumer market. Carmex is utilizing a ________ strategy with its lip balm products.
penetration-pricing
This activity is important because pricing plays a pivotal role in helping a firm achieve its goals. Pricing objectives involves specifying the role of price in an organization's marketing and strategic plans. Marketing managers choose the product's price based, in part, on the firm's pricing objective, which may include profit, sales revenue, market share, unit volume, survival, or social responsibility. The goal of this exercise is to demonstrate your understanding of the different pricing objectives. For each description of different pricing objectives, determine which type of objective it matches up with.
Return on Investment - Profit Macy's - Survival Return on Assets - Profit Country Club - Survival Black Friday - Sales Revenue Special Drug Pricing - Social Responsibility Nike Golf - Market Share Operating Systems - Market Share Florida Summer - Unit Volume U.S. Airways - Market Share iPhone - Unit Volume Hybrid Permits - Social Responsibility
The number of silver sticks ordered for the Moisture Plus product is much lower than the number of yellow tubes ordered for the original Carmex product. With a lower purchase volume, Carmex does not receive a significant discount on the silver tubes from its suppliers. Carmex managers will use a ________ pricing approach to incorporate the price of the packaging into Moisture Plus' final price.
cost-oriented
Because consumers respond more favorably to Carmex when priced at $0.99 versus $1.00, many Carmex product prices end with a 9. This demand-oriented approach is known as
odd-even pricing.
Carmex Moisture Plus is priced between $2.49 and $2.99, a high price compared to the $0.99 Carmex tube. Carmex managers estimated that female consumers would be willing to pay more for the sleek packaging, benefits, and additional ingredients found in the Moisture Plus line and set the price accordingly. Which demand-oriented approach is best reflected in the price of the Moisture Plus line?
target pricing
