Exam 11: Pricing Strategies: Additional Considerations

La Belle released a a cut glass bottle of perfume at $299 per item, even though its major competitor prices its signature scent at $99 per item. La Belle reasons that customers in search of luxury goods will prefer its product because they are likelier to believe that high price indicates superior quality. What price adjustment strategy is evident in its reasoning?

In return for participating in Honda advertising and sales support programs, Honda dealerships are rewarded with payments or price reductions, which are known as ________.

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

Sensenig Propeller manufactures replica antique wooden airplane propellers. In the process of production, the company generates a great deal of scrap hardwood. How can using by-product pricing benefit the company?

Why is predatory pricing considered illegal?

By definition, ________ is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost.

Competitors are most likely to react to a price change when ________.

Which of the following product mix pricing strategies involves pricing products that must or can only be used with the main product?

Give two examples of product bundle pricing.

Shoe Trends, a company that manufactures formal shoes for men and women, offers to give its customers $10 for an old pair of shoes when they buy a new pair. In essence, they're reducing the price of the new shoes by $10. What is this type of price adjustment called?

________ occurs when a seller states price savings that are not actually available to consumers.

Price discrimination is permissible if if the seller manufactures different qualities of the same product for different retailers and can prove that the price difference is proportional.

Which of the following companies uses product line pricing?

When theaters vary their seat prices because of audience preferences for seats in coveted rows, they use ________.

Tone Zone plans to introduce four mp3 player models over the next year. These models range from basic players at $99 per unit, to more sophisticated players at $399 per unit. The more features a model has, the more expensive it is. What pricing strategy is Tone Zone using for its range of mp3 players?

Why might marketers use market-penetration pricing?

For what types of products might marketers use market-skimming pricing?

Noticing that the themed envelopes aren't selling well, Charles Payton decides to offer customers a special "letter writing" kit, He prices the kit-which comprises letter paper, matching envelopes, and pens-at $5, even though the combined prices of the individual items is $8. Which of the following pricing strategies is he using?

When a competitor cuts its price, a company should ________ if it believes it will not lose much market share or would lose too much profit by cutting its own prices.

Which of the following would be considered predatory pricing?