Exam 14: Pricing Concepts for Establishing Value

Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi 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.

In general, prices should not be based on costs because

At the break-even point, profits are maximized.

Which of the following markets is most likely to be characterized by oligopolistic competition in the United States?

How is the price elasticity for Crest toothpaste likely to be different from the price elasticity for all toothpastes (a product category)? Why are they likely to be different?

If a firm is engaged in monopolistic competition, it should seek a way to differentiate itself.

When CarMax promises a "no-haggle" pricing structure, it exhibits ________ because it provides additional value to potential used car buyers by making the process simple and easy.

Marketers spend millions of dollars annually trying to create or reinforce brand loyalty. Brand loyalty changes the demand curve for the firm's products by

The commercial airline industry is considered what type of market?

Price advertisements should never

Suppose that a friend asks you to drive him to the airport this weekend so he can catch a flight. He pays you for the gas used driving to the airport, and for the cost of parking the car at the airport while you help him in with his bags. He then declares that you are now "even," since he has fully compensated you for any costs you incurred in helping him get to his flight. From your perspective, what aspects of the "price" of taking your friend to the airport has he omitted?

Managers of Wendy's fast-food restaurants keep track of prices at competitors such as McDonald's, Burger King, and Arby's, knowing that a decrease in the prices at these other fast-food restaurants will

The break-even point is estimated by

Ryan is the only retailer in his market selling a new, ergonomically designed pen. What are the objectives of using a penetration pricing strategy? Why would Ryan consider using a market penetration pricing strategy?

French luxury goods manufacturer and retailer Hermès is known for making expensive leather goods. But paying $300,168 for a handbag at auction, which is over the standard retail price of $280,000, is extraordinary, and not for the casual shopper. The handbag is considered a

What makes a high/low pricing strategy appealing to sellers?

A demand curve is built on the assumption that

If the fixed costs of manufacturing a new cell phone are $10,000, the sales price is $60, and variable cost per unit is $20, the break-even point is

American Airlines just reduced its fares for summer flights by $100. Delta Airlines changes its pricing structure and reduces its flights by $100 as well. Delta is employing status quo pricing.