Exam 20: Setting Prices

If a product is priced based on how many or how few people want it at a particular time and place, ____ pricing is being used.

Price leaders, comparison discounting, and special-event pricing are applications of

When a satellite dish company uses bundling to combine phone, dish, and broadband Internet access prices, it is attempting to influence a consumer's perception of price to make a product's price more attractive and reduce "sticker shock." This is an example of using a ____ pricing strategy.

Scenario 20.1 Use the following to answer the questions. Suppose that Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. Refer to Scenario 20.1. If Ray-Ban selected the prices for its new sunglasses to be $60, $70, or $80, this would most likely be an example of using ____ pricing to enhance its distinctive positioning strategy.

Which of the following statements is true about the determination of a specific price for a product?

A company wanting to maximize profits from its new product would use product-line pricing.

_____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand.

The local florist advertises a discount on arrangements during the month of April because the anniversary of the store's opening is in April. This is an example of special-event pricing.

When Mia and Shane are planning their honeymoon, their travel agent tells them that if they buy a special package, their trip to Paris will include meals, tickets to the theater, and a rental car in addition to airfare and a hotel. This is an example of the use of

Theatergoers in the Midwest were pleasantly surprised when they arrived at the cinema to see the latest release and learned that a price reduction had just gone into effect. The Wehrenberg Theater chain, which is the oldest theater company and operates in 15 Midwest locations, decided to drop matinee prices from $7.75 to $4.50 per person and reduce evening prices from $9.75 to $7.50 per person. The price decrease is a result of decreased traffic at the theater and a trend for consumers to use Netflix or Hulu to watch movies. The Starplex Cinemas operating in the same communities as Wehrenberg followed suit and reduced their prices to attract consumers as well. The two movie theater chains are utilizing the ______ pricing basis.

Penetration pricing is one new-product pricing approach that provides the most flexible introductory price.

A psychological price is designed to encourage purchases on the basis of rational response rather than on the basis of emotional reactions.

George is excited because he has obtained the price list of his company's major competitor. His supervisor, Homer, is also optimistic. However, he has much more experience in the industry than George and cautions him that just because they have access to their competitor's price list

The pricing of Clinique makeup, which is considerably higher than brands such as Cover Girl, Revlon, and Maybelline, is used to communicate ____, which is the company's primary pricing objective.

Companies use dynamic pricing to balance out supply and demand.

A market share objective

Compare and contrast price skimming and penetration pricing.

If PepsiCo sets its twelve-pack price to match the price charged by Coca-Cola, Pepsi is using which of the following pricing methods?

The government frequently uses competition-based pricing in granting defense contracts.

Explain the difference between cost-plus and markup pricing.