Exam 16: Developing Pricing Strategies and Programs

A company has developed the prototype of a mobile phone that it plans to launch in the next few months. The phone comes equipped with the most advanced technological features. As part of its test marketing efforts, the company allows customers to examine and use the prototype and also gathers feedback regarding product features and price. The results of this test marketing effort show that customers are willing to pay at least $500, considering the phone's various features. As such, the company has discovered customers' ________.

What are the different types of promotional pricing?

________ price refers to what the consumers feel the product should cost.

Which of the following is true regarding price elasticity?

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

Market skimming pricing makes sense under all the following conditions, EXCEPT if ________.

Competitors are most likely to react to a price change when ________.

Customers usually have a lower price threshold below which prices signal inferior or unacceptable quality, as well as an upper price threshold above which prices are prohibitive and the product appears not worth the money.

What are the different types of price discounts and allowances?

________ pricing takes into account a host of inputs, such as the buyer's image of the product performance, the channel deliverables, the warranty quality, customer support, and attributes such as the supplier's reputation, trustworthiness, and esteem.

In ________ pricing, the firm bases its price largely on competitor's prices.

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.

Daryl convinced his prospective client that Car A was the best for him. But, the client insisted that the car cost him a good $10,000 more than Car B, the one which he was thinking of buying. Daryl told him that the amount he would have to spend on the fuel, insurance, repairs, and maintenance for Car B would be 5 times more than what he would have to spend on Car A. Finally convinced, the client consented to buy Car A. What technique did Daryl use to convince his customer?