Exam 19: Pricing Concepts

The most popular method used by wholesalers and retailers in establishing a sales price is _____ pricing.

Demand for which of the following products or services is most likely inelastic?

Specialty Cakes Imagine you're planning an after-symphony fund-raising party,and you need a life-size grand piano cake.Or,you are a developer proposing a new shopping center to a group of investors,and you want to serve a cake shaped like an architectural rendition of the center.Is this impossible? No,you just need to contact Cecilia Villaveces Cakes.She actually built a life-size grand piano for a gala in Macon,Georgia.You can expect to pay anywhere from $75 to $10,000 for one of Cecilia's artistic creations,depending on complexity of design and size.She uses only the best ingredients,and no two cakes are ever quite alike. -Refer to Specialty Cakes.Many party planners in the Southeast will only use Cecilia Villaveces Cakes at their parties-no matter what the price is.They know that Cecilia's cakes can make a party a success.Moreover,the cakes are what people remember most about the parties.From this description,you should assume Cecilia Villaveces Cakes have a(n):

What does the lack of a price-matching guarantee tend to signal to the target market?

Prices always steadily decline for a product in the decline stage of the product life cycle.

When Insight Research Associates quotes a marketing research project,management will first estimate the cost to conduct the research and produce and deliver the final client report.The next step in determining the price is to add 30% to that cost estimate.This becomes the price estimate given to the potential research client.This suggests that Insight Research Associates uses a(n)_____ pricing objective.

One way a firm can gain pricing power is to:

Tesla Motors "Going green" doesn't have to be boring.The Tesla Roadster Sport is an electric car that goes from 0 to 60 in four seconds and drives more like a race car than an environmentally-friendly ride.But that level of performance will set you back $128,500.As of 2009,Silicon Valley-based Tesla Motors,Inc.was the only company offering highway-compatible electric cars.Most Roadster Sport buyers are car enthusiasts and are buying them for the "fun toy" aspect of having an electric car rather than for environmental reasons. -Refer to Tesla Motors.What is the fixed cost contribution for the Roadster given average variable costs of $50,500?

Cowboy Malone's Electric City pays a wholesaler $692 for a television and sells it to a customer for $1,500.The markup on the television is:

Variable costs vary with changes in the level of output,whereas marginal costs do not vary as output changes.

When the local Shell station raises or lowers its prices on its gasoline,the Marathon station across the street makes the same changes in its pricing.This is an example of _____ pricing.

Manufacturers can do all of the following to regain some control over the price their products are sold for at the retail level EXCEPT:

When Apple Inc.originally introduced its iPhone it was priced at what many believed to be about as high as the market would allow.Within weeks Apple lowered the price of the iPhone.It appears that Apple Inc.entered the market with a _____ approach to pricing the iPhone.

The greater the number of different uses for a product,the more _____ demand tends to be.

When consumers are sensitive to price changes,_____ occurs.

List five factors that affect elasticity of demand and briefly describe how each affects demand.

While the sales of the Apple iPhone have been great from the beginning,when Apple released its iPhone 3G and cut the price of the iPhone for $399 to $199,sales exploded.One million iPhones sold the first weekend.Demand for the iPhone appears to be:

Which of the following statements about yield management systems (YMS)is true?

When the price of a product is set at a level where demand and supply are the same,_____ has been achieved.

Which of the following statements about the Internet is true?