Exam 16: Pricing Concepts and Strategies

Bots act as comparison shopping agents because they search the Web for a specific product and print out a list of sites that offer the best prices.

What type of discount is given off the list price for large-volume purchases?

A shortcoming of the breakeven model is that it assumes that per-unit variable costs do not change at different levels of operation.

Online marketing has added a new opportunity for cannibalization.

In the absence of other cues, price is an important indicator of product quality to the consumer.

Identify the determinants of price elasticity for a good or service.

When Sony introduces a newly designed model of an LCD colour television, it should have little difficulty estimating the demand for the product.

Profit is maximized when marginal revenue exceeds marginal cost.

Compare and contrast competitive bidding and negotiated prices.

The Acme Flashlight Company breaks even at 20,000 flashlights at $6 each, with the average variable cost per flashlight of $4. What is the amount of its fixed costs?

All exporters use cost-plus pricing methods to establish dual prices that fully allocate their true domestic and foreign costs to their products.

What type of pricing is being used when the price of Cheerios cereal is displayed as 14.7 cents per gram?

In comparing the top four brands in a market segment, what did the Profit Impact of Market Strategies Project (PIMS) research data reveal was the average, after-tax return on investment percentage that the leading brand generates?

Zone pricing is a modified version of uniform-delivered pricing.

What type of price do large-scale enterprises often have a challenge setting?

Makson's, a manufacturer of fertilizers and pesticides used for agricultural purposes, modifies the prices of its products exported to foreign markets to include the marketing costs in foreign markets but maintains the same price in all its domestic markets. Its products are more expensive in international markets compared to its domestic market where it is sold at a lower price. What is the pricing strategy used by Makson's to differently price its products in foreign markets?

What is the process called in which buyers ask a number of potential suppliers to submit price quotes on a proposed purchase or contract, of which the lowest will be accepted?

What is an inappropriate pricing objective for a not-for-profit organization?

Full-cost pricing allows the marketer to remove arbitrariness from the process and allocate fixed expenses (overhead) realistically across the entire line of products being sold by a firm.

What is the importance of transfer pricing? How does it relate to an organization's profit centre?