Exam 14: Developing Pricing Strategies and Programs

Explain the concept of overdemand.

NV Inc. has launched a touch sensitive handset in the Indian market and priced the same at INR 9500. Although many people are checking it out and showing interest about purchasing it, majority of them are holding themselves back because they feel that it is not worth INR 9500. They compare the handsets' feature with that of its other competitors offering the same features and come to a conclusion that it is worth INR 8500 and nothing more than that. What kind of a reference price are the consumers using?

A firm that is plagued with overcapacity, intense competition, or changing wants would do better if it pursues ________ as its major objective.

Ellie's manager has asked her to come up with ways to reduce costs of their new product by utilizing a process called "target costing." What should Ellie do?

When higher-priced competitors match the lower prices but have longer staying power because of deeper cash reserves, it leads to a(n)________.

________ consist of the sum of the fixed and variable costs for any given level of production.

A company decided to conduct a market survey for its new MP3 player which it had priced at $150. However, in the survey, 95 percent of the participants said that the maximum they would pay for the MP3 player is $100. This is an example of which of the following possible consumer reference prices?

A company does not set a final price until the product is finished or delivered. This is known as ________.

Companies who believe that a higher sales volume leads to lower unit costs and higher long-run profits are attempting to ________.

When hotels, motels, and airlines offer discounts in slow selling periods, they are said to be offering ________.

How can companies initiate price cuts and what are the traps that companies can fall into because of this?

The minimum price that most consumers would pay for a given product is known as the ________ price.

Briefly describe the different types of pricing objectives.

Generally, consumers prefer small price increases on a regular basis to sudden, sharp increases.

When a company requires the customers to pay today's price and all or part of any inflation increase that takes place before delivery, it is known as ________.

In reality, it is very easy for firms to estimate their demand and cost functions.

Offset is a form of countertrade where sellers receive full payment in cash and agree to spend a substantial amount of the money in the country where they are trading within a stated time period.

When hotels drop their rates on the weekends, then this form of price discrimination is known as ________.

________ are granted for turning in old item when buying a new one.

Predatory pricing, which refers to the concept of selling below cost with the intention of destroying competition, is lawful under certain conditions.