MKTG 301 chapter 9

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

Value-added pricing

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

Variable costs

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

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

product line

Segmented pricing

refers to prices that allow for differences in customers, products, or locations.

Promotional pricing

refers to temporary price reductions to spur on short-run sales.

Determining product costs is the __________ step in cost-based pricing.

second

Cost-based pricing is __________.

setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk.

Internal factors that affect pricing include​ ________.

the​ company's overall marketing​ strategy, objectives, marketing​ mix, and other organizational considerations.

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

win a large market share

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

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

When a company sets a high price as the initial price of a new​ product, it is pursuing a​ ________ new product pricing​ strategy.

​market-skimming

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

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

Breakeven pricing

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

Increase both price and quality

__________ 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.

Product line pricing

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

Reduce price

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?

Segmented pricing

__________ is the second step in value-based pricing.

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

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

Target costing

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

Total Costs

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

Price elasticity

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

Dynamic pricing

adjusts prices continually to meet the characteristics and needs of individual customers and situations.

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

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.

captive-product

Fixed costs are __________.

costs that do not vary with production or sales level

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

dynamic pricing

Convincing buyers of a product's value is the __________ step in cost-based pricing.

fourth

__________ is the first step in value-based pricing.

Assessing the customer needs and value perceptions

___________ 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.

Captive-product pricing

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

Customer value based pricing

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

Customer​ value-based pricing,​ cost-based pricing, and​ competition-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 initiating price​ cuts?

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

__________ is the fourth step in value-based pricing.

Designing products to deliver the desired value at a target price

__________ is the third step in value-based pricing.

Determining costs that can be incurred

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

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

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

First

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

Good-Value Costing

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

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

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

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

customer perceptions of the​ product's value

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

price fixing

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

psychological 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

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

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

Internal factors that affect pricing include​ ________.

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

Setting the price is the __________ step in cost-based pricing.

third

Dynamic pricing is when companies continually adjust prices to meet the characteristics and needs of individual customers and situations. Where is this method especially prevalent​ today?

Online buying

Which of the following statements is true regarding how price might play an important role in helping to accomplish company​ objectives?

Pricing can create excitement for a brand.

What are the five product mix pricing​ situations?

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

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 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 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