Exam 10: Pricing: Understanding and Capturing Customer Value

________ prices are the prices that buyers carry in their mind and refers to when looking at a given product. Psychological Reference Promotional Geographical Dynamic

High-low pricing involves setting a product's initial price high and lowering it in six months.

When Circuit Town Electronics sets its televisions at three price levels of $699, $899, and $1,099, it is using ________. product line pricing market-skimming pricing market-penetration pricing break-even pricing target return pricing

Market-skimming pricing is practiced by companies that set a low initial price in order to get their "foot in the door" quickly and deeply, attract a large number of buyers quickly, and win a large market share.

Under ________, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. pure competition monopolistic competition oligopolistic competition a pure monopoly socialism

A company sets not a single price, but rather a ________ that covers different items in its line that change over time as products move through their life cycles. pricing by-product pricing structure pricing loop pricing cycle pricing bundle

Which of the following would likely be ineffective in supporting a market-skimming policy for a new product? The product's quality and image must support its higher price. Enough buyers must want the products at that price. Competitors are not able to undercut the high price. Competitors can enter the market easily. The cost of producing a smaller volume is not so high that it negates the advantage of charging more per unit.

It is most typical for producers who use captive-product pricing to set the price of the main product ________ and set ________ on the supplies necessary to use the product. low; low markups high; low markups low; high markups high; high markups moderately; moderate markups

When Whallans Gift Card Shop offers a price reduction to customers who buy Christmas cards the week after Christmas, Whallans is giving a(n) ________ discount. functional seasonal annual allowance credit

When a manufacturer offers a ________, customers buy products from manufacturers' dealers within a specified time period and the manufacturer sends the customer a check. cash rebate special event price dealer reduction promotional pricing reward discount allowance

Which of the following is not a price adjustment strategy? segmented pricing customer value-based pricing promotional pricing discount and allowance pricing dynamic pricing

What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency? segmented pricing psychological pricing referent pricing promotional pricing dynamic pricing

A company faces fixed costs of $100,000 and variable costs of $8.00/unit.They plan to directly sell their product to the market for $12.00.How many units must they produce and sell to break even? 20,000 25,000 40,000 50,000 not enough information to calculate

Some industries commonly use two-part pricing, where the price is broken down into a fixed fee and a fixed usage rate.

Product costs set a(n) ________ to a product's price. demand curve experience curve floor ceiling break-even cost

Under ________, the market consists of a few sellers who are highly sensitive to each other's pricing and marketing strategies. pure competition monopolistic competition oligopolistic competition a pure monopoly capitalism

General Motors prices its automobiles to achieve a 15 to 20 percent profit on its investment.This approach is called ________. value-based pricing going-rate pricing cost-plus pricing low-price image target return pricing

Companies involved in deciding which items to include in the base price and which to offer as options are engaged in ________ pricing. product bundle optional-product captive-product by-product skimming

The fact that a hot dog costs five times more at Disneyland than at Costco is an example of ________. allowance pricing captive-product pricing penetration pricing segmented pricing promotional pricing

Used too frequently, promotional pricing can have the negative effect of decreasing the brand's value in the eyes of customers.