Exam 20: Setting Prices

When a seller's costs are usually determined during or after a product is made and then a specified percentage or dollar amount is added to the cost to establish a price, an organization is using ____ pricing.

Penetration pricing and price skimming of the market are two types of new-product pricing.

The importance of price depends on the type of product, the type of target market, and the purchase situation.

McDonald's restaurants have experienced declining sales recently due to consumers' increased interest in healthy eating and their preference for fast-casual restaurants such as Chipotle and Noodles. In order to attract more customers to McDonald's, the chain expanded the number of items they are offering on the $1 menu, and many of these items are priced below cost. McDonald's is most likely utilizing a _____ pricing objective.

When Gabriella logs on to Dell's website, she sees a notebook model priced well below $1,000. As she continues through the site to view the other options, she realizes the first one she saw was the cheapest model available, but she of course wants more features. Dell is utilizing

Markup can be stated as a percentage of the cost or as a percentage of the selling price.

Which type of pricing objective can reduce a firm's risk by helping to stabilize demand for its products?

Executives in Japan decided to price Lexus luxury cars in the United States at $55,000 while pricing them at $66,000 in their own country. This is an example of

How might a marketer find information about a competitor's prices? Why is this information important?

You are the head of pricing strategy for your firm, and you are very excited about a new point-of-sale system that has just been installed in all your firm's retail outlets. The system is a state-of-the-art, real-time information system that captures the details of every sale made in your retail outlets. Now you will have up-to-the-minute data on sales volume trends and performances for your entire product line. You plan to use this data to set prices based on these volume trends. Which of the following bases for pricing are you intending to use?

A marketer is usually in a better position to establish prices when it knows the prices charged for competing brands.

Grocery stores that position their less expensive, private brands next to more expensive, well-known manufacturer brands on the shelf are using the concept of reference pricing.

A Macy's manager designs the casual clothing department such that one of Macy's private label pairs of jeans, priced at $24.99, is positioned next to a national brand of jeans, such as Levis, priced at $39.99. What is the manager attempting to accomplish?

Identify and describe seven types of psychological pricing.

The way marketers use pricing in the marketing mix will affect the final price.

Markup is measured either as a percentage of ____ or a percentage of ____.

Random discounting means discounting various products on a systematic basis.

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

Under what conditions would a marketer most likely use a price leader strategy?

If REVO sets the price for its sunglasses at $240, it is most likely using _____pricing to convey ______.