BUSML 3150 Chapter 9
Which of the following statements is correct regarding price changes?
A company that wishes to dominate a market could potentially do so by lowering its prices.
Marketers adjust prices based on ________ pricing, whereby different customers pay different prices for the same product or service.
Customer-segment
Luxury apparel and accessories retailer Michael Kors was charged with tagging products with false "manufacturer's suggested retail prices" to make its supposed discounted prices more appealing when, in fact, the products were sold only in the outlet stores. This is an example of ________.
Deceptive pricing
The seven price adjustment strategies are ________, promotional pricing, geographical pricing, dynamic and personalized pricing, and international pricing.
Discount and allowance pricing, segmented pricing, psychological pricing
Which of the following is true regarding the price-demand relationship?
If demand is elastic, sellers will consider lowering their prices.
Pricing strategies usually change as a product passes through its life cycle but are especially challenging during the _________ stage.
Introductory
There are several types of product mix pricing situations, which include __________, by-product pricing, and product bundle pricing.
Product line pricing, optional-product pricing, captive-product pricing
___________ are payments or price reductions that reward dealers for participating in advertising and sales-support programs.
Promotional allowances
Which is NOT an internal factor affecting pricing decisions?
The nature of the market
External factors when considering pricing include ____________ such as the economy, reseller needs, and government actions.
the nature of the market and demand and environmental factors
Which type of pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items?
High-low pricing
A skimming pricing strategy is most likely to succeed for which of the following conditions?
Competitors should not be able to enter the market quickly.
Value-based pricing begins with analyzing ___________.
Consumer needs and value perceptions
Setting the base price for a product is only the start. The company must then adjust the price to account for ___________ differences.
Customer and situational
_______ of the product's value set the ceiling on pricing, while _______ set the floor.
Customer perceptions; costs
Marketers use three major pricing strategies: _____________.
Customer value-based pricing, cost-based pricing, and competition-based pricing
The three major pricing strategies are ________.
Customer value-based pricing, cost-based pricing, and competition-based pricing
A company's pricing strategy is affected by internal factors such as __________.
Overall marketing strategy, objectives, marketing mix, and organizational considerations
Of the following, which is NOT one of the product-mix pricing situations?
Penetration pricing
With ________ pricing, companies adjust prices in real time to fit individual customer situations, locations, and buying behaviors.
Personalized
A mega-retailer opens a store in a new area. They charge prices that are below cost to drive local stores out of business. This retailer has engaged in which of the following?
Predatory pricing
The illegal practice of selling below cost to harm competitors is known as _________.
Predatory pricing
When competitors set prices by talking with each other, they are engaging in which of the following?
Price-fixing
Combining products for one price can promote the sales of products consumers might not otherwise buy, but the combined price must be low enough to get them to buy the package. This is known as ________ pricing.
Product bundle
Laws prohibit ____________, which means a manufacturer cannot require dealers to charge a specified retail price for its product.
Retail price maintenance
To successfully implement market-penetration pricing, which of the following conditions needs to be present?
The market must be highly price sensitive so that a low price produces more market growth.
Marketers must consider external considerations in establishing pricing. Which of the following represents those external considerations?
The nature of the market, demand, and environmental factors
Printer companies often charge a fairly low price for their inkjet printers (relative to costs) and a high price for replacement cartridges. These companies are using a strategy of ___________ pricing.
Captive-product
A company can use _________ by setting a low initial price to penetrate the market deeply and win a large market share.
Market-penetrating pricing
Which of the following pricing strategies would a company use to attract a large number of buyers quickly and win a large market share?
Market-penetration pricing
In pricing innovative new products, a company can use ________ by initially setting high prices to maximize the amount of revenue from a sufficient number of buyers willing to pay the higher price.
Market-skimming pricing
Federal legislation on _________ states that sellers must set prices without talking to competitors.
Price-fixing
When Microsoft or Apple sells software as a package, it is engaging in what type of pricing?
Product-bundle pricing
Beyond the market and the economy, what other factors in its external environment must a company consider when setting prices?
Resellers, the government, and social concerns
Many amusement parks charge a daily ticket or season pass charge plus additional fees for food and other in-park features. What type of pricing does this exemplify?
Two-part pricing
