Exam 11: Pricing Strategies: Additional Considerations

Explain product line pricing.

Consumers are less likely to use price to judge the quality of a product when they ________.

With which pricing strategy does the seller take responsibility for part or all of the actual freight charges in order to get the desired business?

In segmented pricing, the difference in prices is based on differences in costs.

Leicestershire Renovations has a history of problems with customers who do not pay their bills on time. Leicestershire Renovations wants to improve its cash situation, reduce bad debts, and reduce credit-collection costs. Which of the following forms of pricing would most likely help the firm achieve its goal?

When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive.

Sparkling Valley, a luxury resort, prices cottages facing the lake higher than cottages that do not, even though the cottages and services offered are identical in every other aspect. This form of pricing is called ________.

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

A supermarket places its store brand of blackberry jam priced at $5 per jar in the fruit preserves aisle, alongside the jam jars of a better known brand-whose products are priced at $8 apiece. Store managers reason that customers are more likely to choose the store brand instead of the better known brand when they realize the price difference. What price adjustment strategy is evident in the supermarket's reasoning?

Thinking Cap Corp. prices its various cap designs at different price levels, ranging from $2.05 to $5.95. This is an example of optional product pricing.

Which of the following companies uses product bundle pricing?

Customers located close to a firm are less likely to benefit from FOB-origin pricing than customers located further away.

Explain the factors involved in setting international pricing.

Companies set not a single price, but a pricing ________ which covers different items in its line and changes over time as products move through their life cycles.

When using product bundle pricing, sellers combine several of their products and offer the bundle at an increased price for increased profit.

The New Age Gallery has three admission prices for students, adults, and seniors, even though all three groups are entitled to the same services. This form of pricing is called ________.

Which of the following companies uses captive product pricing?

Which of the following is a price adjustment strategy?

Which term refers to prices that buyers carry in their minds and check with when they look at a given product?

Pricing is difficult because various products have related demand and costs, and producers face different degrees of competition.