Exam 16: Developing Pricing Strategies and Programs

When Sony introduced the first high-definition television to the Japanese market in 1990, it was priced at $43,000, which is an example of partial-cost recovery pricing.

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(True/False)

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Question 1

Correct Answer:

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False

What techniques can a firm use to help consumers avoid sticker shock and a hostile reaction when prices rise?

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(Essay)

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Question 2

Correct Answer:

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One is to maintain a sense of fairness, such as giving customers advance notice so they can do forward buying or shop around. Sharp price increases also need to be explained in understandable terms. Making low-visibility price moves first is also a good technique: Eliminating discounts, increasing minimum order sizes, and curtailing production of low-margin products are examples, and contracts or bids for long-term projects should contain escalator clauses based on such factors as increases in recognized national price indexes.

Many consumers are willing to pay $100 for a perfume that contains $10 worth of scent because the perfume is from a well-known brand. What kind of pricing is the company depending on?

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(Multiple Choice)

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Question 3

Correct Answer:

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

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Question 4

ROC Engineering, a Chinese shipbuilding company, agrees to build a fleet of submarines for the Sri Lankan navy, for which it will be paid in the local Sri Lankan currency. As per the agreement, ROC must also spend a substantial amount of the money it generates through this deal within the country. In accordance with the contract, ROC buys Sri Lankan tea at a reduced rate. This is an example of which of the following forms of countertrade?

(Multiple Choice)

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Question 5

Fred's company has recently sold its resin-producing plant to a business in India. As part of the sales price, his company agrees to accept as partial payment the production of the resin at an agreed upon price for six years. This is an example of what type of countertrade?

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Question 6

The decline in the average cost of production with accumulated production experience is called the ________.

(Multiple Choice)

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Question 7

If firms wish to maximize their market share, they should opt for market-skimming pricing.

(True/False)

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Question 8

When Indu's company printed the ad for their perfume in the newspapers, the caption read, "WAS $100, NOW $75." What kind of a promotional pricing did her company use?

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Question 9

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 ________.

(Multiple Choice)

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Question 10

Companies sometimes initiate price cuts in an attempt to dominate the market through lower costs.

(True/False)

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Question 11

________ pricing is a matter of reengineering the company's operations to become a low-cost producer without sacrificing quality.

(Multiple Choice)

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Question 12

PepsiCo sold its cola syrup to Russia and agreed to buy Russian vodka at a certain rate for sale in the United States for the next five years. What kind of a countertrade did both the parties indulge in?

(Essay)

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Question 13

Ellie's manager has asked her to come up with ways to reduce costs of their new product by utilizing a process called "target costing." What should Ellie do?

(Essay)

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Question 14

Agatha's Inc. is about to introduce a new product in the market, but is not sure as to how it should price the product. The company is facing intense competition from five other companies. In the past, it has also failed to keep up with the changing consumer wants. In such a situation, what should be its main objective?

(Essay)

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Question 15

When Abe goes shopping, he comes across a T-shirt that is priced at $35. Although he wants to buy it, judging from the material used, he feels that the T-shirt should only cost $20. What reference price is Abe using here?

(Essay)

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Question 16

When consumers examine products, they often compare an observed price to an internal price they remember. This is known as a(n) ________ price.

(Multiple Choice)

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Question 17

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

(Multiple Choice)

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Question 18

NV Inc. has launched a touch sensitive handset in the Indian market and priced the same at INR 9500. Although many people are checking it out and showing interest about purchasing it, the majority of them are holding themselves back because they feel that it is not worth INR 9500. They compare the handset's feature with that of its other competitors offering the same features and come to a conclusion that it is worth INR 8500 and nothing more than that. What kind of a reference price are the consumers using?

(Essay)

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Question 19

When higher-priced competitors match lower prices of their competitors but have longer staying power because of deeper cash reserves, it leads to a(n) ________ trap.

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Question 20

Showing 1 - 20 of 153

When Sony introduced the first high-definition television to the Japanese market in 1990, it was priced at $43,000, which is an example of partial-cost recovery pricing.

What techniques can a firm use to help consumers avoid sticker shock and a hostile reaction when prices rise?

Many consumers are willing to pay $100 for a perfume that contains $10 worth of scent because the perfume is from a well-known brand. What kind of pricing is the company depending on?

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

Fred's company has recently sold its resin-producing plant to a business in India. As part of the sales price, his company agrees to accept as partial payment the production of the resin at an agreed upon price for six years. This is an example of what type of countertrade?

The decline in the average cost of production with accumulated production experience is called the ________.

If firms wish to maximize their market share, they should opt for market-skimming pricing.

When Indu's company printed the ad for their perfume in the newspapers, the caption read, "WAS $100, NOW $75." What kind of a promotional pricing did her company use?

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 sometimes initiate price cuts in an attempt to dominate the market through lower costs.

________ pricing is a matter of reengineering the company's operations to become a low-cost producer without sacrificing quality.

PepsiCo sold its cola syrup to Russia and agreed to buy Russian vodka at a certain rate for sale in the United States for the next five years. What kind of a countertrade did both the parties indulge in?

Ellie's manager has asked her to come up with ways to reduce costs of their new product by utilizing a process called "target costing." What should Ellie do?

When Abe goes shopping, he comes across a T-shirt that is priced at $35. Although he wants to buy it, judging from the material used, he feels that the T-shirt should only cost $20. What reference price is Abe using here?

When consumers examine products, they often compare an observed price to an internal price they remember. This is known as a(n) ________ price.

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

When higher-priced competitors match lower prices of their competitors but have longer staying power because of deeper cash reserves, it leads to a(n) ________ trap.

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