Exam 14: Developing Pricing Strategies and Programs

What is third-degree price discrimination?

A Japanese firm is ready to sell its recent technological innovation to the U.S. government. But it has asked for 80 percent in cash and the rest in mica. The Japanese firm is looking to enter into a(n) ________ with the U.S. government.

In a price-war trap, higher-priced competitors match the firm's lower prices but have longer staying power because of deeper cash reserves.

When the airline industries offer discounted but limited early purchases, higher-priced late purchases, and the lowest rates on unsold inventory just before it expires, what kind of a pricing technique are they said to be using?

A quantity discount is a price reduction given to those who pay their bills promptly.

How can companies initiate price cuts and what are the traps that companies can fall into because of this?

The reservation price or the maximum that most consumers would pay for a given product is known as the ________ price.

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

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

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

A company must make payments each month for rent, heat, interest, and salaries. These are ________.

A(n) ________ is an extra payment designed to gain reseller participation in special programs.

In reality, it is very easy for firms to estimate their demand and cost functions.

Starbucks, OSIM, 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.

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

When Gina'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?

________ refers to selling below cost with the intention of destroying competition.

Which of the following auctions is characterized by one seller and many buyers?

In ________, the seller charges different amounts to different classes of buyers.

NV Inc. has launched a touch-sensitive handset in the Indian market and priced it at INR 9500. Although many people are checking it out and showing interest about purchasing it, majority of them are holding themselves back because they feel that it is not worth INR 9500. They compare the handsets' 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?