Exam 14: Pricing Concepts for Capturing Value

If a firm in a purely competitive market can differentiate its product or service, it becomes part of a(n)________ market.

For which of the following is demand likely to be most sensitive to price increases?

In many high-end resort markets, Westin hotels compete directly with Crown Plaza hotels. When it comes to pricing, Westin tends to charge its guests similar rates to what the Crown Plaza hotels charge. Westin is using a ________ pricing strategy.

Production of the DeLorean car, made famous in the film Back to the Future, never got above 25,000 units during its lifetime. Automobile industry analysts estimate that production of this car needed to reach around 300,000 units to achieve the ________, which refers to a decrease in unit cost as product volume increases.

For which of the following is demand likely to be least sensitive to price increases?

Costs related to supply and costs related to demand are the two primary cost categories.

Explain the difference between fixed and variable costs and provide examples of each.

Christine owns a bakery where she sells donuts. Two blocks down there is another bakery that sells donuts for $1 less than Christine. Christine decides to lower her price and match the other bakery. What type of pricing orientation is Christine implementing?

Monopolistic competition occurs when there are many firms competing for customers in a given market but their products are differentiated.

Raymond owns Pederson's computer repair service. He has observed over the years that customers keep their older-model computers longer when the economy is doing poorly, creating demand for his maintenance and repair service. Raymond has observed the impact of ________ on demand for his service.

A reference price might be considered deceptive if

When the major league baseball season opens in April, teams located in the Midwest and Northeast are still experiencing cold and frequently rainy weather. This often results in fewer fans attending these April games. What can these ball clubs do to maximize their revenue during this time period?

Gail operates on a tight budget. She buys store or generic brands to save money. Recently, Gail was given a substantial pay raise. Now, she has altered her shopping patterns and regularly buys more expensive, name-brand goods. This is an example of

Which of the five Cs of pricing demonstrates the different goals each company embraces?

Price is the only part of the marketing mix that does not generate costs.

Phillip is a luxury RV dealer in the midwestern United States. For years he has had difficulty selling these RVs locally because there were few places for customers to store the RVs off-season. RVs and spaces to store them are an example of

Small-business consultants are constantly admonishing would-be entrepreneurs, "Beware of the overhead." Using an overhead (fixed costs)of $100,000 and then an overhead of $200,000, with a contribution per unit of $50, determine the break-even points.

Pristine Shoe Store is trying to compete with the local Foot Stuffs store. When Foot Stuffs offers lower prices on certain shoes during its "back-to-school promotion month," Pristine Shoes reduces the price of its similar shoes in order to compete. What pricing orientation is being utilized by Pristine Shoe Store?

Historically, prices were

At Michael's college, the local Dunkin' Donuts gives a 10 percent discount to students. Is this price discrimination? Why or why not?