Exam 10: Pricing: Understanding and Capturing Customer Value

Companies bringing out a new product can choose between two broad strategies: market-skimming pricing and market-penetration pricing.Distinguish between the two.

A break-even chart shows the total cost and total revenue expected at various sales volume levels.

________ that influence pricing decisions include the nature of the market and demand. Internal factors Elasticity factors External factors Target factors Domestic factors

Vac 'N' Sew will give customers $100 for a used vacuum cleaner, regardless of condition, when they purchase a new vacuum or sewing machine.This essentially reduces the price by $100.What is this type of discount called? functional discount captive-product discount seasonal discount trade-in allowance by-product allowance

The company designs what it considers to be a good product, totals the expenses of making the product, and sets a price that adds a standard mark-up to the cost of the product.This approach to pricing is called ________ pricing. value-based fixed cost cost-plus variable skimming

Explain how web retailers can initiate dynamic pricing.

Which of the following is the least likely reason for a company to initiate a price cut? to boost sales to obtain prestige to dominate the market to relieve excess capacity to influence falling demand

In ________, price is considered along with the other marketing mix variables before the marketing program is set. target return pricing value-based pricing variable costs price elasticity cost-based pricing

Prices have a direct impact on a company's bottom line.

Compare the practices of price-fixing and predatory pricing, explaining why each is prohibited by law.

When setting prices, the company must consider its external environment.Describe four aspects of the external environment and how they affect businesses.

The Winnipeg Goldeyes ballpark charges different prices for seats in different areas of the ballpark, even though their costs are the same.What is this form of pricing called? location-based skimming product-form time-based penetration

With target costing, marketers will first ________ and then ________. build the marketing mix; identify the target market identify the target market; build the marketing mix design the product; determine its cost use skimming pricing; use penetrating pricing determine a selling price; target costs to ensure that the price is met

The Competition Act is the federal law that were enacted to curb the formation of ________. unfair competition oligopolies competitive markets international markets limited partnerships

In a pure monopoly, the market consists of one seller.

A marketer's fixed costs are $400,000, the variable cost is $16, and the company expects the product to sell for $24.What is the break-even volume in units?

Price is the only element in the marketing mix that produces ________. revenue variable costs expenses fixed costs stability

Fixed costs ________ as the number of units produced increases. decrease increase divide in half remain the same increase at a diminishing rate

Patti is starting a small chocolate chip cookie company.What might be some variable costs in her company?

A company should set prices that will allow ________ to receive a fair profit. resellers producers consumers the elderly competitors