Exam 14: Developing Pricing Strategies and Programs

When Ian 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 Ian using here?

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.

The price of tickets to the opera vary depending on where the person would like to be seated-in the gallery or in the stalls. This is an example of ________.

In a(n) ________, the buyer announces something he or she wants to buy, and potential sellers compete to offer the lowest price.

________ are granted for turning in old item when buying a new one.

What are the different forms of countertrade?

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

The first step in estimating demand is to ________.

Briefly describe the different types of pricing objectives.

After determining its pricing objectives, what is the next logical step a firm should take in setting its pricing policy?

What are the different possible consumer reference prices?

In markets that are characterized by products that are highly homogeneous, how should a firm react to a competitor's reduction in price?

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

The key to effectively using perceived-value pricing is to deliver value that is on par with your competitors.

Price elasticity depends upon the magnitude and direction of the contemplated price change.

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

In oligopolistic industries, all firms normally charge the same price. What kind of a pricing method are they said to be following?

Generally, consumers prefer small price increases on a regular basis to sudden, sharp increases.

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 a pricing is the company depending on?