MKTG 301 (Clubb) Chapter 9: Pricing Understanding and Capturing Customer Value

Captive-product strategy

Printer companies often charge a fairly low price for their ink jet printers​ (relative to​ costs) and a high price for replacement cartridges. These companies are using a strategy of​ ________ pricing.

Customer perceptions of the​ product's value

The price​ ceiling, the maximum price a company can​ charge, is set by​ ________.

Online buying

Where is this dynamic pricing especially prevalent​ today?

Designing products to deliver the desired value at a target price

________ is the fourth step in value-based pricing

Setting a target price to match customer perceived value is the second step.

________ is the second step in value-based pricing

Determining the costs that can be incurred is the third step.

________ is the third step in value-based pricing

Good-value pricing

_________ is offering just the right combination of quality and good service at a fair price.

Market-skimming pricing

_________ is setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales.

Market-penetration pricing

_________ is setting a low price for a new product in order to attract a large number of buyers and a large market share.

Product line pricing

_________ is setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices.

Market-penetration pricing​ strategy

A company has set a low price on a new product it introduced. It wants to maximize its market share and attract a large number of buyers quickly. Which new product pricing strategy should the company​ use?

The​ company's overall marketing​ strategy, objectives, and marketing​ mix, as well as other organizational considerations.

Internal factors that affect pricing include​ ________.

Segmented​ pricing strategy

Many state colleges and universities charge one price for​ in-state students and a higher price for​ out-of-state students. Which price adjustment strategy are these schools​ using?

Variable costs

_________ is/are costs that vary directly with the level of production.

Target costing

_________ is/are pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met.

Total cost

_________ is/are the sum of the fixed and variable costs for any given level of production.

Value-added pricing

__________ is attaching features and services to differentiate a company's offers and charging higher prices.

Captive-product pricing

__________ is setting a price for products that must be used along with a main product, such as blades for a razor and games for a video-game console.

Price

__________ is the amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service.

Setting a target price to match the customer's perceived value

__________ is the second step in value-based pricing.

A demand curve

__________ shows the number of units the market will buy in a given time period, at different prices that might be changed.

Product line​ pricing, optional-product​ pricing, captive-product​ pricing, by-product​ pricing, and product bundle pricing

What are the five product mix pricing​ situations?

Customer​ value-based pricing,​ cost-based pricing, and​ competition-based pricing

What are the three major pricing strategies used by​ marketers?

Psychological pricing

With ________, the price is used to say something about the product.

Improve quality and increase price

________ is a potentially effective action a company could take in response to a​ competitor's price​ cut

Assessing customer needs and value perceptions is the first step in the process.

________ is the first step in value-based pricing

Fixed costs

________ is/are costs that do not vary with production or sales level.

Price elasticity

_________ is a measure of the sensitivity of demand to changes in price.

Customer value-based pricing

_________ is based on a buyer's perceptions of value rather than on the seller's cost.

Cost-based pricing

_________ is setting p rices based on the cost of producing, distributing and selling the product plus a fair rate of return for effort and risk.

Dynamic pricing

_________ is when companies continually adjust prices to meet the characteristics and needs of individual customers and situations.

Segmented pricing

_________ is when the company sells a product or service at two or more​ prices, even though the difference in prices is not based on differences​ in costs.