Exam 20: Setting Prices

The Office Place is an office supplies company that has just adjusted its price levels so that it can increase its sales volume to match its expenses. The Office Place is most likely employing a____ objective.

Due to the ease of comparison shopping through the Internet, many marketers are focusing on the value of their products in communications with customers.

A marketer is most likely to set prices according to a cash-flow objective when a

How are pricing objectives similar to a corporation's overall goals? How are they different?

A price-leader approach is a pricing approach most often used in supermarkets to attract consumers by giving them special low prices on a few items.

What are some of the objectives a firm might hope to achieve when setting prices?

Which pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry?

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. Ray-Ban's plan of gathering information about the other brands sold in department stores, including their prices, would most likely be used in a ____ basis for pricing.

Gambrell Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle; therefore, its marketing department sets its primary pricing objective as

Pfizer wants to price its newest medication product so that it earns a 35% return on investment. It chose this pricing objective because of the significant amount of resources it spent on research and development. What is one challenge of using return on investment as a pricing strategy?

When products in an industry are relatively homogeneous and price is a key purchase consideration,

Periodic discounting is often predictable so consumers wait to make purchases until they can benefit from the price reductions.

You are head of sales and marketing for your firm, and you are meeting with the CEO to establish pricing objectives for the upcoming product year. Which of the following factors are you going to consider as you establish your firm's pricing objectives?

Competition-based pricing is important if competing products are almost homogeneous or if price is the key variable in the marketing strategy.

The price of a hotel room is more important to a business traveler than to a tourist.

Odd-even pricing is

Pricing the basic product in a product line low while pricing related items at a higher level is called

Zoey is setting a price for her store's newest item. She purchased the item for $45 and decides to sell it for $54 using markup pricing. If she wanted to calculate the markup as percentage of cost, it would be ______________. If she wanted to calculate the markup as the percentage of the selling price, it would be ______________.

What is bundle pricing? Give three examples, each one from a different industry.

A sale that advertised prices "up to 65% off" the original price uses