MKT Exam 3 Chapter 9 Moore

product line pricing

A key element of​ Smashburger's pricing strategy is determining price steps between its​ quarter-pound, one-third​ pound, and​ half-pound hamburgers. The practice of setting prices for different products offered by a company within a single category is known as​ __________.

value-added

According to the​ video, by offering an a la carte​ menu, premium​ ingredients, and gourmet side​ dishes, Smashburger is able to extract a price premium from its loyal customers. This type of pricing approach is referred to as​ __________ pricing.

Break-even pricing

If a company wishes to sell the exact number of units to cover both its variable and fixed​ costs, what type of pricing strategy is it​ using?

Example of deceptive pricing:

Kitchens and More is an appliance retailer. In an ad in the local newspaper, Kitchens and More offers a brand name refrigerator for $100. A consumer who sees the ad visits Kitchens and More and asks to see the refrigerator on sale. A sales associateexplains to the consumer that Kitchens and More only stocked one of the $100 refrigerators, and it has been sold within five minutes of the store opening that day. He suggests the consumer browse the other refrigerators Kitchens and More sells.

product bundle pricing

Many of​ Smashburger's competitors combine a​ burger, fries, and a drink offered at a reduced​ "combo" price. This practice is known as​ __________.

price inelastic

Smashburger is investigating adding a​ half-pound burger to the menu at a lower price point. It has performed​ market-pricing experiments, with the new burger listed at either​ $4.29 or​ $3.99. The company has found little change in sales at the lower price. Based upon this​ finding, one could say that demand for the new burger is​ ___________.

Price elasticity

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

Value-added pricing

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

Customer value-based pricing

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

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.

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.

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.

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.

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 the customer's perceived value

__________ is the second step in value-based pricing.

Determining costs that can be incurred

__________ is the third step in value-based pricing.

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 costs

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

A demand curve

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

Fixed costs are __________.

costs that do not vary with production or sales level

Elastic

is as the price goes up or down, the demand will also fluctuate.

Inelastic

is as the price goes up or down, the demand will remain relatively constant.

Competition-based pricing

After researching products similar to yours in the​ industry, you decide that your product has superior value. As​ such, you decide to price your product above the other products in the same industry. Which type of pricing strategy are you most likely​ using?

Customer value-based pricing

As a​ marketer, you decide to focus not on the cost of producing the​ product, but rather on the​ customer's perception of the value of the product. Which type of pricing are you engaged​ in?

Example of predatory pricing:

Bob's Boxes sells cardboard boxes to consumer packaged goods manufacturers. Bob's competition, a start-up company called Carl's Cardboards, has been stealing market share from Bob's Boxes. Bob decides to lower his prices below cost to push Carl's Cardboards out of business.

first

Designing a good product is the __________ step in cost-based pricing.

Good-value pricing

Offering just the right combination of quality and good service at a fair price is known as which type of​ strategy?

reference price

Smashburger is seeking to attract customers who eat out at casual dining​ restaurants, like P.F.​ Chang's and​ Applebee's. The average ticket price for customers at these restaurants is​ $13. For these​ customers, $13 is a​ __________ in considering the relative value of​ Smashburger's offerings.

Example of price fixing:

Stu's Salon and Hal's Haircuts are the only two barber shops in Smallville. Both shops are always busy. Stu's and Hal's grandsons play soccer together. At one soccer match, Stu and Hal talk with each other about their shops. The next day, both Stu's Salon and Hal's Haircuts institute a 10% increase in prices for services.

pyschological pricing

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

Cost-plus pricing

You paid 75 cents for a can of soda this morning.​ However, the​ seller's cost is only 50 cents. Which type of selling strategy is the soda company most likely​ using?

Example of price discrimination:

Zinia Home Goods manufactures small furnishings that are sold in two different department stores. Zinia offers the exact same vase to both department stores, but sells the vase for $10 more at one of the department stores. There is no difference in the vase offered and no difference in the two department stores.

Psychological pricing

is setting a higher price to communicate a psychological advantage to the product.

Bundling

is the offer the card-holder keychain for no additional cost if the consumer buys the satchel, overnight bag, and laptop all together.

Partitioned pricing

is the offer the card-holder keychain only by itself, at its own retail price.

Market penetration pricing strategy

is the price very low initially.

Market skimming pricing strategy

is the setting the price very high initially.

Promotional pricing

is the temporarily setting the price low to create buying excitemnet and urgency.

Captive pricing

is to charge a lower price for a base product, knowing consumers will need to buy replacement parts or supplementary products.

Geographic pricing

is to charge consumers higher or lower depending on where they live.

Dynamic pricing

is to give you company the flexibility to quickly change the price when Grazzi does.