Exam 10: Pricing: Understanding and Capturing Customer Value

Scenario Quills, Inc., is a manufacturer of ball-point pens, pencils, and stationery.The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains.Charles Powell, CEO of Quills, had hoped to manufacture and sell in large enough quantities that prices could be held low.However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets. Why might Charles Powell have avoided using market-skimming pricing at Quills?

________ pricing is the approach of setting a low initial price in order to attract a large number of buyers quickly and win a large market share. Market-skimming Market-penetration Below-market Value-based Leader

Which of the following is an external factor that affects pricing decisions? the salaries of production management competition the salaries of finance management overall pricing objectives the company's overall marketing strategy

Scenario Quills, Inc., is a manufacturer of ball-point pens, pencils, and stationery.The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains.Charles Powell, CEO of Quills, had hoped to manufacture and sell in large enough quantities that prices could be held low.However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets. Explain how product-form pricing may be a pricing option at Quills.

Describe what a demand curve is and explain how it helps businesses.

Costs that do not vary with production or sales level are referred to as ________ costs. fixed variable target total unit

Which pricing mix strategy should be used in relation to saleable scrap materials, and how does this strategy function?

The simplest pricing method is ________. value-based pricing going-rate and sealed-bid pricing cost-plus pricing break-even analysis target return pricing

Scenario Quills, Inc., is a manufacturer of ball-point pens, pencils, and stationery.The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains.Charles Powell, CEO of Quills, had hoped to manufacture and sell in large enough quantities that prices could be held low.However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets. How can Quills avoid retail price maintenance?

Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and ________. market-level pricing market-competitive pricing market-skimming pricing market-price lining market-price filling

When a competitor cuts its price, a company might decide to ________ if it believes it will not lose much market share or would lose too much profit by cutting its own price. reduce its production costs reduce its marketing costs maintain its current price and profit margin increase its marketing budget to raise the perceived value of its product increase its production costs to improve the quality of the product

When General Motors provides payments or price reductions to its new car dealers as rewards for participating in advertising and sales support programs, it is granting a(n) ________. trade discount functional discount allowance promotional allowance trade credit

Price discrimination is legal under which of the following conditions? when a manufacturer and reseller have agreed upon a specified retail price for a product when a manufacturer sells to retailers in different markets if a seller can prove its costs per unit are different when selling to different retailers if a seller advertises prices that are not actually available to consumers if a seller has not communicated with competitors before announcing prices

Hotline Long Distance Service uses captive-product pricing for its phone call charges.Because this is a service, the price is broken into a fixed rate plus a per-call ________. fixed rate usage variable usage rate standard usage rate market usage rate fixed fee

For what types of products might marketers use market-skimming pricing?

Compare pure competition with monopolistic competition conditions.

Explain the concept of a price ceiling.

Consumers use price less to judge the quality of a product when they ________. lack information lack skills to use the product have experience with the product are shopping for a specialty item cannot physically examine the product

Which of the following conditions would be least likely to support market-penetration pricing? The market must be highly price sensitive. Production and distribution costs must fall as sales volume increases. The product's quality and image must support the price. The low price must help keep out the competition. A low price will produce more market growth.

________ is the amount of money charged for a product or service. Experience curve Demand curve Price Wage Salary