Exam 12: Pricing Concepts and Management

If Kroger Food Stores advertises 2-liter bottles of Pepsi for 89 cents to generate store traffic that will purchase other items at regular prices, the grocer is using:

A price-leader approach is a pricing approach most often used in supermarkets to attract consumers by giving them special low prices on a few items.

An early-bird special offered by a restaurant during off-peak hours is an example of the secondary-market pricing strategy.

When an organization sets a number of prices for selected groups of merchandise, this is commonly referred to as:

Marketers should set prices consistent with the firm's marketing and overall objectives.

In some cases, prices are assigned to goods on the basis of tradition.

Maintaining a certain market share, meeting competitors' prices, maintaining a favorable image, and achieving price stability are all associated with a pricing objective.

Scenario 12.2 Use the following to answer the questions. Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store. A lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. -Refer to Scenario 12.2. Ray-Ban's plan of gathering information about the other brands sold in department stores, including their prices, would most likely be used in a basis for pricing.

The effectiveness of demand-based pricing often depends on a marketer's ability to determine all the costs associated with the product.

During July and August, Lakewood Links Golf Course, located in South Carolina, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of:

When marketers at Consolidated Mustard Company tried to determine demand for their product, they found that at 50 cents, consumers wanted 2,000 jars; at $1.00, they wanted 6,000 jars; and at $1.50, they wanted 4,000 jars. What can Consolidated conclude?

Reference pricing is:

Describe the eight stages of the process that marketers can use to establish prices.

To attract customers into a store, Safeway advertises its milk at a lower cost, hoping that customers will purchase other groceries as well. This pricing strategy is called:

When a satellite dish company uses bundling to combine phone, dish, and broadband Internet access prices, it is attempting to influence a consumer's perception of price to make a product's price more attractive and reduce "sticker shock." This is an example of using a pricing strategy.

A penetration pricing strategy is particularly appropriate when demand is:

The objective of maintaining or increasing market share depends on growth in industry sales.

Why is the marginal revenue of a product important to the marketer?

When marketers emphasize price as an issue and match or beat the prices of other companies, they are engaging in:

The use of price skimming discourages competitors from entering a market.