CU- Price Unit Review
Premium Pricing
A new company is offering a luxury. The company wants to establish itself as an elite brand. What strategy of pricing should be used?
Prestige
A product priced at $100 creates the perception of a ___________ product.
Odd/Even Pricing
A product priced at $119.99 as opposed to $120 is an example of:
$37.50
A shoe store uses a 50% markup on cost. Find the selling price of a pair of shoes the retailer paid $25 for.
Bargain
A watch priced at $79.99 is using odd pricing to convey a:
Total utility will exhibit a falling rate as more units are consumed
According to the law of diminishing marginal utility:
Consumers will substitute other products for the one whose price has risen.
An increase in the price of a product will reduce the amount of it purchased because:
Demand
Analyzing and using the highest acceptable price consumers are willing to pay would describe _______-based pricing.
Allowance
Bob buys a new phone, but trades in his old phone to receive a discount. This would be an example of which type of discount pricing?
Law of Diminishing Marginal Utility
Consumers will only purchase so much of a product, even when the price is low. This statement conveys the:
Variable Costs
Costs which generally increase at a constant rate relative to output are known as:
Inelastic Demand
Demand for a product does not decrease based on a rise in its price. This product has:
Penetration Pricing
During the introduction stage of a product, what is the pricing strategy used to build hype and a large customer base?
Loss Leader
Gabby's Clothing is having a sale where jeans are priced at $25. At this price, the business is losing money, but hopes to earn money by getting customers in the door. In this example, the jeans are a:
Pricing
Gaining market share, challenging competitors, and maximizing profits are objectives of:
Loss Leader Pricing
If a company wants to generate store traffic without a concern for profit, which pricing strategy should be considered?
Product Mix Pricing
If a marketer combines several products into a "bundle" and sells it under one price, slightly cheaper than purchasing all the products separately, this would be an example of:
Inelastic; Elastic
If a product is unique, it is likely to have ________ demand. However, a product with many substitutes will have ______ demand.
Elastic
If a small change in price is accompanied by a decrease in quantity demanded the product's demand is said to be:
Supply
In perfect economic theory, when the price of a product rises, its ___________ also rises because the product is more profitable to provide.
Target market
Knowing the objectives for a company's pricing decisions and keeping the ___________ in mind guides marketer's decisions about pricing strategies.
Introductory
Many businesses choose to initially price products low or high during the __________ phase of a product.
Low: high markups
Many producers who use captive-product pricing set the price of the main product ________ and set ________ on the supplies necessary to use the product.
By-Product
Material that is leftover and that a business cannot use from their original product, but can use it to make a different product, or sell it to someone who can use it.
During the development or introductory phase of a product's life cycle
Penetration pricing and price skimming are marketing strategies commonly implemented:
Prestige Pricing
Prices which are set high to project status, high quality, or exclusivity equate to:
Price Discrimination
Selling the same product at different prices to different buyers.
A designer line of purses and shoes.
Skimming pricing would be most effective when selling:
Equilibrium Point
Suppliers are selling all the goods they have produced, and consumers are getting all the goods they demand. This is known as _____________, the point where allocation of goods is the most efficient.
Price
The amount of money expected, required, or given in payment for a product.
Cash Discount
The discount given when a business pays within a certain time period.
Fall
The law of demand states that when prices rise, demand will:
Growth
The phase of the product life cycle when production is optimized and manufacturing becomes as efficient as possible.
Marketing Mix
The pricing function is an integral part of the company's:
Markup Pricing
This pricing method is commonly used by retailers and wholesalers and is a form of cost-based pricing.
Law of Diminishing Marginal Utility
This refers to the decline of satisfaction per additional unit being added to consumption.
Price Fixing
Two business competitors have agreed to set the dollar amount of gas at a certain point. These businesses are illegally practicing:
Competition Based Pricing
Uses prices of "like" products from competitors as a benchmark instead of considering their own costs or the customer demand.
Price Skimming
What pricing technique includes the business setting high prices to initially establish an elite audience?
Cost-Based Pricing
When a fixed sum or a percentage is added to the cost of the product to arrive at its selling price.
Break-Even Point
When a product's revenue equals the total costs and expenses to produce the product, this is known as the:
Competition
When setting prices, Metro Electronics must consider factors in its external environment such as government regulation and:
Electronics
Which of the following goods would you expect to have the highest elasticity of demand?
Predatory Pricing
Which pricing strategy would be attempted by unethical marketers to price its products way below its competitors in hopes of driving the competition out of business?
Psychological Pricing
_____ creates an illusion for customers and are often based on a buyer's motivation for making a purchase.
Value
_______ is the extent to which a good or service is perceived by its customer to meet his or her needs or wants, measured by customer's willingness to pay for it.
Demand
____________ is how much of a product or service is desired by qualified buyers at a specific price.
Utility
_____________ is the total satisfaction received from consuming a good or service.
