Exam 8: Value-Based Pricing and Pricing Strategies

________ pricing involves raising prices incrementally to the point where the best combination of volume and margin is achieved during the mature stage of the product life-cycle.

A company that sells its product for a higher price than its competitor can offer a higher economic value to customers.

Which of the following is most likely to be considered when using a cost-based pricing strategy?

MINI-CASE Smith Automotive is a company that produces component parts for automobile engines.A margin of $4 per unit produces fixed expenses of $80 million.The market demand for the component parts is 400 million units per year. -Mini-Case Question.Determine the margin per unit if the company needs to sell 40 million units in order to break even.

Price elasticity is almost always a negative number due to the inverse relationship between price and volume.

Which of the following is true of price elasticity?

Life-cycle costs of ownership include acquisition cost,ownership cost,usage cost,repair/maintenance cost and disposal cost/value.

A low-cost leader in a market is by definition the volume leader.

Which of the following is true of single-segment pricing strategy?

Which of the following types of pricing considers neither what the buyer would be willing to pay for product performance nor the pricing of competitive products in the market?

________ programs allow a business to test price-performance preferences and to evaluate its product's value on the basis of the business's competitive position.

Which of the following is true of penetration pricing?

A company has an operating income of $20 million and total fixed expenses of $10 million.5 million units are produced at a margin of $6 per unit.What should the margin per unit be if the company needs to achieve a break-even volume for the same number of units?

Reduce-focus pricing is most likely to occur in the ________ stage of the product life cycle.

The number of performance aspects that can be evaluated in a price-performance trade-off analysis is limited.

Which of the following is true of skim pricing?

MINI-CASE Smith Automotive is a company that produces component parts for automobile engines.A margin of $4 per unit produces fixed expenses of $80 million.The market demand for the component parts is 400 million units per year. -Mini-Case Question.Determine the required volume if the company's operating income is $20 million.

When the management team noted the increased interest in bikes as a mode of commuting,bicycle manufacturer Sensta introduced utility bikes aimed at the urban commuter.In which of the following cases is the company following a plus-one pricing strategy?

Juliet repairs,buys,and sells old video games to a growing customer base of collectors and fans.She finds that as the products get scarcer,she can charge higher prices for her services and products.This is an example of ________.

Harvest pricing is usually used in the ________ stage of the product life cycle.