chapter 20 concept checks

Assume a retailer purchases a can of premium dog food at $2.25 and adds 75 cents to the cost, making the price $3. What is the markup as a percentage of selling price?

25%

Which of the following should be accomplished after developing pricing objectives?

assessing the target market's evaluation of price

Which of the following pricing strategies sets the basic product in a product line low, but the price on the items required to operate or enhance it are higher?

captive pricing

The Federal Trade Commission has established guidelines for _______: If the higher price against which the comparison is made is the price formerly charged for the product, the seller must have made the previous price available to customers for a reasonable time period.

comparison discounting

Which of the following is often used by producers of relatively homogeneous products, especially when the target market considers price to be an important purchase consideration?

competition-based pricing

Which of the following price bases is mostly likely to be used for commercial construction projects or custom made equipment?

cost-plus pricing

Kara Thrace operates a service business that engages in systematically collecting data on brands and prices at competitors' stores. For which stage of the price establishment process would this service be most appropriate?

evaluating competitors' prices

In the absence of government controls, pricing is a(n) ____ and ____ way to adjust the marketing mix.

flexible; convenient

ACME has a pricing objective to increase its primary product's sales relative to total industry sales. This is best describe as a(n) _____.

market share objective

Sleep Train's Presidents Day sales are an example of _____.

periodic discounting

Which pricing strategy provides the most flexible introductory base price?

price skimming

Which of the following objectives is likely to be more expensive for a firm as the cost of materials and research and development may be greater?

product quality

Which of the following product-line pricing strategies is NOT generally used for business products?

psychological pricing

Which of the following pricing objectives can reduce a firm's risks by helping to stabilize demand for its products?

status quo

Firefly Space Shuttles is using a strategy of maximizing revenues by making numerous price changes in response to demand, competitors' prices, or environmental conditions. This is best described as _____.

yield management