Exam 14: Developing Pricing Strategies and Programs

One of the traps of instituting a price decrease is when that low price buys market share in the short term.The same customers will shift to any lower-priced product that may come along.This trap is called ________.

Despite its weaknesses,markup pricing remains popular for which of the following reasons?

The Internet is largely a one-sided tool that benefits buyers,but not sellers.

Texas Instruments builds a large plant to produce a great quantity of products,hoping that as prices decline,sales volume increases and thus costs decline.This market-penetration pricing is dependent upon three conditions existing in the marketplace.Which one of the following is NOT one of these conditions?

When the salesperson at the local luxury car dealer pitches a customer on the dealer's "free maintenance for 36 months or 36,000 miles whichever comes first," the salesperson is trying to overcome the car's initial high cost by using what method?

Although consumers may have fairly good knowledge of the range of prices involved,very few can accurately recall specific prices of products.

Research has shown that consumers tend to process prices in a "left-to-right" manner rather than by rounding.With this knowledge,which of the following prices would seem to be a better physiological price?

In one type of ________,the auctioneer announces a high price for a product and then slowly decreases the price until a bidder accepts the price.

Your company has recently sold its resin-producing plant in India to a local concern.As part of the sales price,your company agrees to accept as partial payment the production of the resin at an agreed upon price for six years.This is an example of what type of countertrade?

A company's costs take two forms.________ are costs that do not vary with production or sales revenue.

In target-return pricing,the firm determines the markup required and adds that amount to the fixed cost of the product.

The concept of the lowest ________ means that a seller can charge a higher price if they can convince the customers that price is only a small part of the total cost of obtaining,operating,and servicing the product over its lifetime.

Companies often raise their prices by more than the inflationary cost increases as preparation for further inflation or government price controls.This practice is known as ________.

The definition of ________ prices is: In considering an observed price,consumers often compare it to an internal memory reference price or an external frame of reference (such as a posted "regular retail price").

The seller sells a plant,equipment,or technology to another country and agrees to accept as partial payment products manufactured with the supplied equipment in a ________.

Auction-type pricing is becoming very popular due to the Internet.The three types of auction pricing include sealed-bid auctions,descending bids auctions,and ________.

When supermarkets and department stores drop the price on well-known brands to stimulate store traffic,this is called ________.

At 1,000 calculators per day,Texas Instrument's factory is running at full capacity.This means that the cost of each calculator is now at its ________ cost.

________ is the direct exchange of goods,with no money and no third party involved.

If variable costs are $10 per unit,fixed costs are $300,000,and expected unit sales are 50,000,the unit cost is ________.