Exam 20: Setting Prices

If an organization sets prices to recover research and development expenses and establish a premium quality image for its product, it would be using a ____ pricing objective.

Which of the following pricing strategies often results in a retailer losing money on the product?

What type of pricing strategy is used in a situation where the seller has an ethical responsibility not to overcharge the client and the fees do not relate directly to the time and/or effort spent in specific cases?

Cost-based pricing strategies result in a percentage being added to the cost of the product.

Westin Hotels, Inc. has an objective of achieving a 25% return from its overall sales. This is an example of a ____ pricing objective.

When determining the markup, it is important to know whether it is based on cost or selling price.

If Kroger food stores advertise 2-liter bottles of Pepsi for 89 cents to generate store traffic so that shoppers will purchase other items at regular prices, the grocer is using

If Norelco introduced a new electric razor that sonically removes hair and priced it first at $175 and then at $150 before reducing the price to $100, the firm's initial pricing strategy is known as

Which of the following is true about the evaluation of competitors' prices?

Maria recently put her house on the market at an asking price of $260,000. She realizes, however, that in order to sell the house, she may have to use

Marketers at organizations engaged in nonprice competition

Competition-based pricing is

Some stores employ comparison shoppers to learn what prices their competitors are charging.

Target has worked closely with suppliers such as Calphalon to offer customers a high-quality, branded product that is only available in Target stores. Due to these partnerships, Target has established a high level of perceived _______ among their customers since they provide a large range of brand-name merchandise at reasonable or below-competition prices.

It is usually easy to obtain an accurate price list for a competitor's products.

Captive pricing, premium pricing, bait pricing, and price lining are all strategies aimed at maximizing the profits of an entire product line rather than an individual product.

Prestige pricing is used when a higher price is consistent with buyers' attitudes toward the quality or image of a product.

Describe the six steps of the process that marketers can use to establish prices.

Scenario 20.2 Use the following to answer the questions. Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services. After reviewing the previous three years' revenue, Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill. Glenwood's objective is to generate more income per customer on an annual basis. The hospital has previously priced its services by charging a flat fee for the office visit, a fee for each vaccine, and a fee for each type of examination beyond the basic office visit. Most customers pay the flat office fee and a fee for a rabies vaccine. Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit, the required rabies vaccine, and additional vaccines that prevent heartworm, kennel-cough, and fleas. Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program, rather than a one-time annual visit. Refer to Scenario 20.2. Glenwood has decided that it is going to offer a special package offer if the prevention plan is purchased within the first 30 days of each year's time for vaccinations. This type of pricing strategy would be an example of

Information about competitors' prices