Exam 10: Pricing Products: Understanding and Capturing Customer Value

The demand curve shows the number of units the market will buy in a given time period at different prices that might be charged.In normal cases,the higher the price,the lower the demand.

Consumers who have less time and patience for watching for supermarket specials and clipping coupons would most likely prefer ________.

With ________,price is set to match customer's perceptions of product value.

Lawyers,accountants,and other professionals typically price by adding a standard markup for profit.This is known as ________.

When companies set prices,the government and social concerns are two ________ affecting pricing decisions.

Markup pricing is popular because prices tend to be similar and price competition is thus minimized.

Refer to the scenario below to answer the following questions. Pensonic Manufacturing produces small kitchen appliances-blenders, hand mixers, and electric skillets. Pensonic attempts to target newlyweds and first-time home buyers with this brand, under a market share leadership strategy. In considering that most young households have limited financial resources, Pensonic has attempted to engage in target costing. "In doing this," Pensonic's manager Abdul Razak stated, "we have better control over keeping price right in line with customers." Pensonic manufactures a three-speed blender, its top seller, and a five-speed blender. The hand mixers are manufactured in two styles-a small hand-held mixer with two rotating beaters and a similar style that comes with an optional stand and attached mixing bowl. Alden's temperature-controlled skillets are manufactured in one style with three color options. "Our product offerings are narrower," Abdul Razak added, "but our line workers know each product like the back of their hands. This allows us to produce superior products while holding our prices low." -Abdul Razak uses a target costing strategy.Which of the following is he most likely to do in executing this strategy?

The LRAC is most closely related to which of the following?

Average cost increases with accumulated production experience.

Wal-mart is famous for using what important type of value pricing?

Price setting is usually determined by ________ in large companies.

Costs that vary directly with the level of production are referred to as ________.

What must a company using value-based pricing find out about its customers?

A marketer's fixed costs are $400,000,the variable cost is $16,and the company expects the product to sell for $24.What is the company's break-even point in dollar sales?

Measuring ________ can be difficult.A company might conduct surveys or experiments to test this in the different products it offers.

An important type of good-value pricing at the retail level is _________________.

________ is an important element in the marketing mix.It is the only element that does not represent costs.

Trader Joe's offers an assortment of exclusive gourmet products at impossibly low prices.These prices are not limited-time offers or special discounts.Instead,they reflect Trader Joe's ________ strategy.

Why is price considered to be one of the most flexible elements of the marketing mix?

In industries in which pricing is a key factor,________ often set the best prices or help others in setting them.