Chapter 14

The graph that shows how many units of a product or service consumers will want during a specific period at different prices is known as the Blank______ curve.

demand

Which of the following are reasons that firms implement a market penetration pricing strategy? (Choose every correct answer.)

To earn profits To discourage competitors To establish market share To build sales

For a Blank______ strategy to work, consumers must believe that the product or service offers an innovation or other benefit not available from the competition.

price skimming

Competition, channel members, costs, customers, and company objectives are the five critical components of Blank

pricing

The five Cs of pricing are examples of pricing Blank______.

strategies

A pricing Blank______ is the general way a company decides how its prices will be determined over the long term, based on the five Cs of pricing.

strategy

Which of the following is one of the five Cs of pricing?

Competition

How does penetration pricing discourage rival companies from entering the market? (Choose every correct answer.)

Competitors who enter the market will temporarily face higher unit costs. The profit potential in the market is relatively low.

Break-even analysis examines the relationships between which of the following? (Choose every correct answer.)

Cost Price

What advantage is there for a company to offer products at prices below actual market value?

Customers are more likely to try the product because they are not risking as much money.

True or false: A firm with a primary objective of very high sales growth will have the same pricing strategy as a firm with a primary objective of being a quality leader.

False

Which of the following strategies results in relatively high unit costs associated with producing small volumes of products?

Price skimming

Which pricing strategy appeals to consumers because it reduces their need to spend time comparing prices at various stores?

Everyday low pricing

What is a useful technique that enables managers to examine the relationships among cost, price, revenue, and profit over different levels of production and sales?

Break-even analysis

Which of the following are considered part of the five Cs of pricing? (Choose every correct answer.)

Channel members Customers Company objectives Competition

Which is one of the five Cs of pricing?

Company objectives

Which of the following belong to the five Cs of pricing? (Select all that apply.)

Company objectives Channel members Costs

Which pricing strategy features frequent sales, during which prices are lowered for a short time?

High/low pricing

Which pricing strategy should retailers use to tap into consumer excitement about buying something at a special low price for a limited time?

High/low pricing

Which of the following is another term for target return percentage?

Markup

When a new product or service is launched, what type of pricing strategy attempts to attract customers quickly by offering a very low price at first?

Penetration pricing

What pricing strategy should marketers adopt when selling to consumers who are willing to pay a premium price to be early adopters of a new product?

Price skimming

Which of the following are drawbacks of a market penetration pricing strategy? (Choose every correct answer.)

Setting the price lower than the item's value "leaves money on the table." Setting low prices may indicate to consumers that the product is not of high quality. Companies need to have a large production capacity.

Multiple Choice Question When the price of a new product is being set via price skimming, what happens after the first round of sales has saturated the high-price market?

The company lowers its price somewhat to attract customers from the next segment of the market.

Companies using a price skimming strategy must ensure which of the following? (Choose every correct answer.)

The initial price is not too low. Competitors cannot enter the market easily.

Which is the best definition of price?

The overall sacrifice a consumer is willing to make to buy a product or service

What are drawbacks of price skimming?

The unit costs of producing small volumes of products is relatively high. Customers who buy the product may feel cheated when the price is eventually lowered.

Which of the following accurately characterize demand curves? (Choose every correct answer.)

They show how much consumers will demand during a specific period at different prices. They relate demand to prices while assuming everything else remains unchanged.

What information is gained by adding variable and fixed costs together?

Total cost

Which of the following do you need to know to calculate target return price? (Check all that apply.)

Variable costs Fixed costs Expected unit sales

How is total cost calculated?

Variable costs plus fixed costs

Channel members include which of the following? (Choose every correct answer.)

Wholesalers Retailers Manufacturers

The five Cs of pricing are company objectives, customers, cost, channel members, an

competitive

The goal of a(n) ___ strategy is to generate profit and establish a new product or service in the market as quickly as possible.

market penetration

The overall sacrifice a consumer makes to acquire a product or service is known as

price