Marketing Exam #3 - Chapter 9

Which of the following is a​ cost-oriented pricing​ approach?

Breakeven pricing

________ refers to setting price based on​ buyers' perception of value rather than on the​ seller's cost.

Customer​ value-based pricing

Which of the following statements is true regarding initiating price​ cuts?

Cutting prices in an industry loaded with excess capacity may lead to price wars.

Which of the following statements is true regarding oligopolistic​ competition?

Each seller is alert and responsive to​ competitors' pricing strategies and marketing moves

Sadie's Restaurant has listened to its customers over the years and is now able to offer the right combination of quality and good service at a fair price. Which pricing strategy is​ Sadie's using?

Good-value pricing

Which of the following is true regarding the​ price-demand relationship?

If demand is​ elastic, sellers will consider lowering their price.

Which of the following is a potentially effective action a company could take in response to a​ competitor's price​ cut?

Reduce price

New, premium movie theaters offer features such as online reserved​ seating, high-backed leather executive chairs with armrests and​ footrests, the latest in digital​ sound, super-wide​ screens, and other amenities for which they charge a higher price. This is an example of which type of​ pricing?

Value-added pricing

Which of the following statements is true regarding initiating price​ increases?

Wherever​ possible, the company should consider ways to meet higher costs or demand without raising prices.

UPS charges different prices for shipping depending on an​ item's destination. The more distant the city the package is being shipped​ to, the higher the price UPS charges. Which geographic pricing method is UPS​ using?

Zone pricing

Margaret 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​ ________.

an indicator of quality

Gillette charges a fairly low price for its razors​ (relative to​ costs) and a high price for razor blades. It is using a strategy of​ ___________ pricing.

captive-product

Companies that use​ ________ continually adjust prices to meet the characteristics and needs of individual customers and situations.

dynamic pricing

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

location-based pricing

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?

market-penetration pricing

When Apple Computer Company introduced its​ iPhone, its priced the new product at​ $599, considerably higher than either their iPod or competing cellular phones. Apple Computer was pursuing a​ ___________________ new product pricing​ strategy.

market-skimming

A car buyer can choose a base model at one​ price, or one with a premium sound and navigation system at a higher price. This is an example of​ _______ pricing.

optional-product

Selling below cost with the intention of punishing a competitor or gaining higher​ long-run profits by putting competitors out of business is an illegal practice called​ _______.

predatory pricing

Over the​ years, U.S. air carriers have been accused numerous times of collusion when setting prices. This illegal practice is called​ _______.

price fixing

The Ford Mustang is offered in several different models. Ford will use​ __________ pricing to determine the price steps between the different models.

product line

Bath​ & Body Works offers​ "three-fer" deals on its soaps and lotions​ (such as three antibacterial soaps for​ $10). This is an example of​ _______ pricing.

product-bundle

A retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store. This is an example of​ _________ pricing.

promotional

Geared2Beer, a craft beer​ brand, identifies a market segment that is willing to pay premium prices for its craft​ beer, and Geared2Beer managers select an ideal selling price. Managers then determine the costs to create craft beer that meets the ideal selling price. The​ company's pricing approach is referred to as​ ________.

target costing

Internal factors that affect pricing include​ ________.

the​ company's overall marketing​ strategy, objectives, and marketing mix

One major objective associated with a​ market-penetration pricing strategy is to​ ________.

win a large market share