Exam 16: Developing Pricing Strategies and Programs

If demand changes considerably, with a small change in price, the demand is said to be ________.

When supermarkets and department stores drop the price on well-known brands to stimulate store traffic, they are said to be following ________ pricing.

Shrinking the amount of product instead of raising the price is a good way to counteract consumer resistance to price increases.

When a company introduces a product at a high price and then gradually drops the price over time, it is pursuing a ________ strategy.

A company decided to conduct a market survey for its new MP3 player that the company had priced at $150. In the survey, 95 percent of participants said that the maximum they would pay for the MP3 player is $100. This is an example of which of the following possible consumer reference prices?

What are the different types of promotional pricing?

When Coca-Cola carries a different price depending on whether the consumer purchases it in a fine restaurant, a fast-food restaurant, or a vending machine, then this form of price discrimination is known as ________ pricing.

The first step in estimating demand is to ________.

Starbucks, Aveda, and BMW have been able to position themselves within their categories by combining quality, luxury, and premium prices with an intensely loyal customer base. These companies are employing a ________ strategy.

A company that pays its bills each month for its rent, heat, interest, and salaries regardless of its output is said to be incurring what type of costs?

When examining products, consumers compare an observed price to an internal reference price they remember or an external frame of reference.

What are the different price-setting methods? Briefly describe each of them.

When a company requires customers to pay today's price and all or part of any inflation increase that takes place before delivery, it is known as ________.

Companies who believe that higher sales volume leads to lower unit costs and higher long-run profits are attempting to ________.

When PepsiCo sold its cola syrup to Russia for rubles and agreed to buy Russian vodka at a certain rate for sale in the United States, it was engaged in the form of countertrade known as an offset.

Experience-curve pricing ________.

One of the weaknesses of using surveys to estimate the demand curve is that consumers exaggerate their willingness to pay for new products and services.

A firm in a homogeneous market that has the ability to augment its product is more likely to need to meet a competitive price reduction than one that does not have the ability to augment its product.

In a compensation deal, the seller sells a plant, equipment, or technology to another country and agrees to accept as partial payment products manufactured with the supplied equipment.

The airline industries implement yield pricing by offering discounted but limited early purchases, higher-priced late purchases, and the lowest rates on unsold inventory just before it expires.