Exam 10: Pricing: Understanding and Capturing Customer Value

If Northwest Awnings charges the same price for delivery of their product to any customer that is located within the Great Lakes states, the company is using ________. psychological pricing promotional pricing reference pricing zone pricing uniform-delivered pricing

Explain product line pricing.

________ describes how responsive demand will be to a change in price. Price elasticity Break-even pricing The break-even chart Target costing Supply

Measuring ________ can be difficult.A company might conduct surveys or experiments to test this in the different products they offer. target returns fixed costs perceived value break-even pricing variable costs

Swatch surveyed the market and identified an unserved segment of watch buyers.Using these results, they created a watch at a price consumers were willing to pay.The unorthodox order of this marketing mix decision is an example of ________. competition-based pricing cost-plus pricing target costing value-based pricing penetration pricing

When using price steps, the seller must establish perceived ________ that support the price differences among the products in the line. non-price competition value differences quantity levels images strategies

Target costing reverses the usual marketing process.

Market-skimming is a more popular strategy for pricing new products, while market-penetration is a more popular strategy for pricing products that are more advanced in the product life cycle.

Under which type of geographic pricing strategy does each customer pay the exact freight for the product from the factory to its destination? basing-point pricing freight-absorption pricing FOB-origin pricing dynamic pricing zone pricing

Explain the concept of a price floor.

Explain the psychology behind a price of $9.99 instead of $10.00.

Market-skimming pricing would likely be most effective in selling ________. any convenience item an electronic device for which research and development must be recouped shampoo and bath soap anything easily copied by competitors most items at EDLP retailers such as Wal-Mart

When there is price competition, many companies adopt ________ rather than cutting prices to match competitors. pricing power value-added pricing strategies fixed costs price elasticity image pricing

Which of the following is likely to be the least effective action that a company can take to combat a competitor's price cut on a product? reduce price raise perceived value improve quality and increase price bundle products together launch a low-price "fighting brand"

When companies set prices, the government and social concerns are two ________ affecting pricing decisions. external factors internal factors economic conditions demand curves temporary influences

Value-based pricing is being used when costs vary directly with the level of product.

A firm is using ________ when it charges a high, premium price for a new product with the intention of reducing the price in the future. price skimming trial pricing value pricing market-penetration pricing prestige pricing

________ are the sum of the ________ and ________ for any given level of production. Fixed costs; variable; total costs Fixed costs; total; variable costs Variable costs; fixed; total costs Total costs; fixed; variable costs Break-even costs; fixed; total costs

Explain the factors involved in setting international pricing.

When consumers cannot judge the quality of a product because they lack information or skill, they are likely to perceive a higher-priced product as having higher quality.