3250 Ch. 11 ?s

Companies that set a low initial price in order to attract a large number of buyers quickly and win a large market share are employing a​ ________ pricing strategy.

market-penetration market-penetration pricing, companies set a low initial price to penetrate the market quickly and deeply in order to attract a large number of buyers quickly and win a large market share. The high sales volume results in falling​ costs, allowing companies to cut prices even further.

When a phone company releases its greatly anticipated new phone models at a premium​ price, only to discount them slowly over​ time, this is an example of a​ ________ pricing strategy.

market-skimming "market-skimming" refers to a pricing strategy by which makers of new products set high initial prices in order to skim revenues layer by layer from the market.

Combo meals at​ fast-food restaurants are an example of​ ________ pricing.

product bundle

​________ pricing is an appropriate strategy for companies that offer multiple products within a given category with varying levels of quality or functionality.

product line product-line pricing, management must determine the price steps to set between the various products in a line.

A grocery store places its store brand picante​ salsa, priced at​ $2.49, directly next to bottles of national brand Pace picante​ salsa, priced at​ $3.19. In so​ doing, the store is encouraging the use of the higher priced item as a​ ________ price.

reference Reference prices are prices that buyers carry in their minds and refer to when looking at a given product. The reference price might be formed by noting current​ prices, remembering past​ prices, or assessing the buying situation. For​ example, a grocery retailer might place its store brand of bran flakes and raisins cereal priced at​ $2.49 next to​ Kellogg's Raisin Bran priced at​ $3.79.