chapter 9
Price Adjustment Strategies
1. Discount and allowance pricing 2. Segmented pricing 3. Psychological pricing 4. Promotional pricing 5. Geographical pricing 6. Dynamic pricing 7. International pricing
Forms of promotional pricing
1. Discounts and special-event pricing 2. Limited-time offers and cash rebates 3. Low-interest financing and longer warranties 4. Free maintenance
External factors affect price deicciosn
1. market and demand 2. economy 3. impact on other parties in its environment
internal factors affect price decision
1. overall marketing strategy, objectives mix 2. organizational consideration (top mgmt)
If the company has selected its target market and positioning carefully, then its marketing mix strategy, including price, will be fairly straightforward. Of the following, which is NOT one of the common pricing objectives? A. Grabbing international market share B. Preventing competition C. Avoiding government intervention D. Supporting resellers and gaining their support E. Customer retention and building profitable customer relationships
A
When sellers set prices in conjunction or collaboration with one another, this illegal practice is known as _______________. A. price-fixing B. price discrimination C. retail price maintenance D. predatory pricing E. deceptive pricing
A
zone pricing
A geographical pricing strategy in which the company sets up two or more zones. All customers within a zone pay the same total price; the more distant the zone, the higher the price.
Internal factors that affect pricing include _________________. A. The company's overall marketing strategy, objectives, and the nature of the market B. The company's overall marketing strategy, objectives, and marketing mix C. The company's overall marketing strategy, objectives, and demand D. The company's overall marketing strategy, the nature of the market, and demand E. The nature of the market, demand, and the economy
B
Marketers must consider external considerations in establishing pricing. Which of the following represents those external considerations? A. Demand, revenue objectives, and stakeholder requirements B. The nature of the market and demand and other environmental factors C. Market strategy, environmental factors, and distribution channels D. The nature of the market and environmental factors E. Demand, market strategy, and the effect of reseller actions
B
A variation of break-even pricing is ____________________, which uses the concept of a break-even chart that shows the total cost and total revenue expected at different sales volume levels. A. High-low pricing B. Competition-based pricing C. Target return pricing D. Everyday low pricing (EDLP) E. Value-added pricing
C
A company's pricing strategy is affected by internal factors such as ___________________. A. overall marketing strategy, objectives, demand, and international considerations B. the nature of the market, demand, and the economy C. overall marketing strategy, objectives, marketing mix, and other organizational considerations D. overall marketing strategy, objectives, and market conditions E. overall marketing strategy, the nature of the market, and demand
C
How do companies apply pricing strategies to accommodate differences in customer segments and situations? A.They use selective promotional pricing strategies. B.They focus on segmented pricing strategies. C.They apply a variety of price adjustment strategies. D.They use accommodations such as preferred pricing strategies. E.They create price allowance pricing strategies.
C
The illegal practice of ______________________ is selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business. A. price-fixing B. deceptive pricing C. predatory pricing D. price discrimination E. price maintenance
C
Which of the following reverses the usual process of first designing a new product, determining its cost, and then asking, "Can we sell it for that?" A. EDLP B. target return pricing C. target costing D. cost-plus pricing E. value-added pricing
C
Types of Cost-Based Pricing
Cost-plus pricing (markup pricing) Break-even pricing (target return pricing)
Of the following, which is core element of our free-market economy? A. Free trade B. Price cuts C. Cost controls D. Price competition E. Uniform pricing regulations
D
Roshika has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as ________. A. a type of segmented pricing B. an indicator of the cost of production C. an indicator of geographic pricing D. an indicator of quality E. a limited-time offer
D
When Apple introduced its iPhone X, it priced the new product at nearly $1,000, considerably higher than competing smart phones. Apple was pursuing a ___________________ new product pricing strategy. A. optional-product B. by-product C. captive-product D. premium pricing E. market-penetration
D
The Robinson-Patman Act seeks to ensure that sellers offer the same price terms to customers at a given level of trade to prevent ______________________. A. retail price maintenance B. deceptive pricing C. price-fixing D. predatory pricing E. price discrimination
E
UPS uses _________________, which charges different prices for shipping depending on an item's destination. The more distant the city where the package is being shipped, the higher the price UPS charges. A. free on board (FOB) origin B. base-point pricing C. freight-absorption pricing D. uniform-delivered pricing E. zone pricing
E
geographical pricing
FOB Orgin, Freight Absorption, Zone, Uniform, Base-point
nonprice positions
Other companies deemphasize price and use other marketing mix tools to create nonprice positions. Often, the best strategy is not to charge the lowest price but rather to differentiate the marketing offer to make it worth a higher price. For example, luxury smartphone maker Vertu puts very high value into its products and charges premium prices to match that value.
premium pricing
Pricing the highest-quality or most versatile products higher than other models in the product line
basing-point pricing
a geographical pricing strategy in which the seller designates some city as a basing point and charges all customers the freight cost from that city to the customer
freight absorption pricing
a price tactic in which the seller pays all or part of the actual freight charges and does not pass them on to the buyer
cost-plus pricing
adding a standard markup to the cost of the product (成本+利润)
dynamic pricing
adjusting prices continually to meet the characteristics and needs of individual customers and situations
price fixing
an agreement among firms to charge one price for the same good (不和竞争者协商)
Value-added pricing
attaching value-added features and services to differentiate a company's offers and charging higher prices
Break-even pricing
break even (break-even volume) = fixed costs / (price - variable costs) = $6,000,000 / ($15 - $5) = 600,000).
uniformed delivered pricing
charge the same price, 不管location
Customer value-based pricing
cost-based, value-based
FOB pricing (free on board)
customer pay
segmented pricing
customer segment, product form, location, time
3 pricing strategies
customer value-based pricing, cost-based pricing, and competition-based pricing
New Product Pricing Strategies
market skimming pricing market penetration pricing
deceptive pricing
price deals that mislead consumers (不清楚)
target costing
pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met
Product Mix Pricing Strategies
product line pricing, optional product pricing, captive product pricing, by-product pricing, product bundle pricing
allowance
promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way
price maintenance
requiring dealers to charge a specified retail price (任意charge 经销商)
predatory pricing
selling a product below cost to drive competitors out of the market
Segmented pricing
selling a product or service at two or more prices, where the difference in prices is not based on differences in costs
captive product pricing
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
product line pricing
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
price discrimination
the business practice of selling the same good at different prices to different customers
option-product pricing
the pricing of optional or accessory products along with a main product
