Exam 14: Developing Pricing Strategies and Programs

The price elasticity of demand rarely varies between the short and long term.

Baxter Healthcare,a leading medical products firm,was able to secure a contract for an information management system from Columbia/HCA,a leading health care provider,by guaranteeing the firm several million dollars in savings over an eight-year period.This is an example of ________.

Starbucks coffee,Aveda shampoo,and BMW cars 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 different customer groups are charged different prices for the same product or service,it is called ________.

You are introducing a new product to the market;in fact,you are first with this new product to the marketplace.In developing your pricing strategy,it was decided that the price of the product should be at the maximum the market would bear.This is an example of what type of pricing strategy?

In a classic study,Farris and Reibstein examined the relationships among relative price,relative quality,and relative advertising for 227 consumer businesses.List and briefly explain their findings.

Predatory pricing-selling below cost with the intention of destroying competition-is legal under certain conditions.

Price is one of the two elements of the marketing mix that produce revenue.

Research on reference prices has found that "unpleasant surprises"-when perceived price is lower than the stated price-can have a greater impact on purchase likelihood than pleasant surprises.

A firm must set a price for the first time when it develops a new product,when it introduces its regular product into a new distribution channel or geographical area,and when it ________.

In market-penetration pricing,the company's objective is to ________,believing that higher sales volume will lead to lower unit costs and higher long-run profits.

In exchange for the distribution of your products overseas,your firm has accepted to receive a shipment of imported products in trade.This is an example of what type of countertrade?

Today's companies try to adapt their offers and terms to different buyers.________ accounting tries to identify the real costs associated with serving each customer.It allocates indirect costs to the activities that use them and are tagged back to each customer.

Explain the difference between everyday low pricing (EDLP)and high-low pricing.

In attempt to "rein in" the continued discounting by the sales force,you implement a net price analysis program to arrive at the "real price" of your products.Describe the steps necessary to implement such a program.

The last price paid,competitors' prices,and the expected future price all serve as customer ________.

Activity-based cost accounting is just another method to distribute attributable costs across the product line.

Explain how Armani uses consumer psychology to charge at least 20 times more for a black T-shirt than do Gap or H&M.

Companies sometimes initiate price cuts in a drive to dominate the market through lower costs.One of the possible traps of a price-cutting strategy is ________.

Purchase decisions are based on how consumers perceive prices and what they consider the current actual price and not the marketer's stated price.