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Exam 11: Pricing Products and Services

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Question 181

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In some cases,penetration pricing may follow skimming pricing.The skimming pricing would help __________ and the penetration pricing would help__________.

A) increase market share; attract price-insensitive customers
B) attract price sensitive customers; increase market share
C) recoup initial research and development costs; increase market share
D) recoup initial research and development costs; improve firm reputation
E) increase market share; attract price insensitive customers

F) A) and E)
G) None of the above

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Question 182

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Which of the following statements about consumer demand as a pricing constraint is most accurate?

A) The number of potential buyers for the product class has little effect on the price a seller can charge.
B) The number of potential buyers for the product affects the price a seller can charge,but only if the product is a luxury item.
C) The number of potential buyers for the product affects the price a seller can charge,but only if the product is a necessity item.
D) The number of potential buyers for the brand affects the price a seller can charge in the growth stage of a product life cycle,but not in the introductory stage.
E) In general,the demand for a product affects the price a seller can charge.

F) A) and E)
G) None of the above

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Question 183

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With cost-oriented approaches to pricing,a price setter stresses the __________ side of the pricing problem,not the __________ side.

A custom tailor wishes to use target profit pricing to establish a price for a custom-designed business suit.Assume variable cost is $200 per suit,fixed cost is $44,000,and the target profit is $50,000 based on a volume of 50 suits.What price should be charged for a typical custom suit?

Why do manufacturers offer seasonal discounts to channel members? Provide an example of how one would work.

Calculate a firm's total revenue (TR) using the following information: the unit price (P) for a product is $40; the quantity sold (Q) is 2,000; the fixed cost (FC) is $50,000; and the variable cost (VC) is $20,000.

A construction company was offered a 3 percent reduction in price off all invoices from a lumber yard for paying them within 10 days of issue.The lumber yard was offering a

UMD11: Price Premium Marketing Dashboard -The UMD11: Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks.What is the price premium for Monster in 2009?

Recently,much of the western U.S.experienced a drought condition and water usage was restricted in Denver.Yet even though most people used less water,the price of water did not drop.When the drought was declared over,the water company raised water prices.However,the residents of Denver did not use less water.Here,water is

The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service is referred to as __________.

In the early 1980s,typical round-trip coach airfares from the East Coast to London were more than $500.Then Freddie Laker introduced the People's Express,a competing service into Newark at $350.Major airlines matched his price-and continued to do so until they drove People's Express out of business.Then prices shot back up to over $500.A lawsuit filed under the Sherman Act resulted in the judgment that the major airlines had explicitly tried to destroy a competitor.The experience of People's Express is an example of __________ on the part of the major airlines

From a marketing viewpoint,__________ is money or other considerations (including other products and services) exchanged for the ownership or use of a product or service.

Figure 11-2 -Figure 11-2 above represents the four approaches to selecting an appropriate price level."D" includes customary and loss leader so it represents which approach?

The break-even point (BEP) = [Fixed cost ÷ (__________ − Unit variable cost) ].

Tendollars.com offers thousands of gifts,all priced at $10.This is an example of two pricing methods working in tandem.The firm is MOST LIKELY using a(n) __________.

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point.Four common approaches to selecting an approximate price level are: (1) demand-oriented; (2) cost-oriented; (3) profit-oriented; and (4) __________ approaches.

Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product is referred to as a

Trade discounts are offered to resellers in the marketing channel on the basis of the marketing activities they are expected to perform in the future and

A manufacturer of a digital video recorder (DVR) is thinking of using a skimming pricing strategy for its new product.Which of the following conditions would argue AGAINST using a skimming pricing strategy for the DVR?

The owner of a small restaurant that sells take-out fried chicken and biscuits pays each month $2,500 in rent,$500 in utilities,$750 interest on his loan,insurance premium of $200,and $250 on advertising on local buses.A bucket of take-out chicken is priced at $9.50.Unit variable costs for the bucket of chicken are $5.50.How many small buckets of chicken does the restaurant need to sell to break-even each month?