Exam 14: Developing Pricing Strategies and Programs

When a retailer puts a sign on a product that says "reduced" or a retailer puts a sign on a product that says "compare to XXX at $10.00 more," the retailer is encouraging what kind of pricing psychology for its shoppers?

Many consumers use price as an indicator of quality and value.

Value pricing is not a matter of simply setting lower prices;it is a matter of reengineering the company's operations to become a low-cost producer without sacrificing quality and lowering prices significantly to attract a large number of ________ customers.

If demand hardly changes with a small change in price,we say that the demand is ________.

Companies often adjust their basic price to accommodate differences in customers,products,locations,and so forth.Examples of these differentiated prices include all of the following EXCEPT ________.

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

The final price charged by the company does not necessarily have to take into account the brand's quality and advertising relative to competition.

Psychological discounting involves setting an artificially high price and then offering the product at substantial savings.

For price discrimination to work,certain conditions must exist.List and briefly explain these conditions.

Prior research has shown that although consumers may have fairly good knowledge of the range of prices involved,surprisingly few can recall specific prices of products accurately.When examining products,consumers often employ reference prices.List the possible prices consumers use as their "reference."

A well-designed and marketed product can command a price premium and reap big profits.

The formula for the break-even volume calculation is ________.

In ________ pricing,the company decides how to price its products to different customers in different locations and countries.

In responding to a competitor's price cut,a firm in a nonhomogeneous market has more latitude and should consider what four issues before responding?

________ communicates to the market the company's intended value positioning of its product or brand.

If consumers were largely indifferent to a $0.10 increase in the price of a gallon of milk,the rise can be said to fall within customers' ________.

Identify and discuss the six steps of the pricing procedure.

IKEA and Southwest Airlines are among the best practitioners of value pricing-win loyal customers by charging a fairly low price for a high-quality offering.Why is value pricing not a matter of simply lowering prices?

All products have experienced heavy discounting in recent years.

Traditionally,________ has operated as the major determinant of buyer choice.