Exam 19: Pricing Concepts

What is marginal revenue? Based on the provided schedule from the Chesapeake Bay Swing Company,at which quantity should Chesapeake Bay stop producing additional swings? 1 \ 260 \ 160 \2 00 2 110 140 270 3 190 120 340 4 170 140 370 5 160 160 370 6 150 180 340 7 120 220 240

Markup pricing,adding an amount to cost to cover expenses and profit,is one of the most common pricing methods used by intermediaries to establish a selling price.

American Girl Doll The American Girl catalog began as a concept to introduce today's girls to girls who lived in the past.Each historically accurate doll is carefully crafted and dressed and has books to describe her life.For example,Kristen is an 1854 pioneer girl who is growing up in Minnesota.Her story begins with her long sea voyage from Sweden.The basic doll dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota costs $90.Six more hardback books of Kristen's life are available for $74.95.Kristen's nightgown costs $20,and a matching one for the doll owner is an additional $38.Buy both together and the price is only $50.A hand-painted wooden bed and trunk for Kristen are available for $213.Shipping costs vary with the price of the merchandise ordered. -Refer to the American Girl Doll.American Girl is the primary seller of historically accurate dolls with accompanying books in a market where there is very little competition.It has no cash flow problems and is not interested in maximizing its sales.From this information,you should know American Girl has _____ pricing objectives.

Which of the following is most likely to be a variable cost for an Internet retailer that sells spices,herbs,and seasonings to consumers?

Define price and discuss the two roles price plays in the evaluation of product alternatives.

When the Apple iPhone 3G was introduced the Apple iTunes web site also began selling small program "apps" written by third parties that could be run on the iPhone.One interesting app was the "I Am Rich" application.For a price of $1,000 you could buy this app that did nothing but display a red gem on the iPhone's screen.The description of the app stated that this red icon would remind you (and others you show it to)"that you were rich enough to afford this." Six of the applications were sold before Apple Inc.removed the app from iTunes.At the $1,000 price the author of the app was using _____ pricing as part of his marketing approach.

If a company's pricing objective is to meet the competition or to maintain existing prices,it is using _____ pricing.

American Girl Doll The American Girl catalog began as a concept to introduce today's girls to girls who lived in the past.Each historically accurate doll is carefully crafted and dressed and has books to describe her life.For example,Kristen is an 1854 pioneer girl who is growing up in Minnesota.Her story begins with her long sea voyage from Sweden.The basic doll dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota costs $90.Six more hardback books of Kristen's life are available for $74.95.Kristen's nightgown costs $20,and a matching one for the doll owner is an additional $38.Buy both together and the price is only $50.A hand-painted wooden bed and trunk for Kristen are available for $213.Shipping costs vary with the price of the merchandise ordered. -Refer to the American Girl Doll.Based on the information in the narrative above,which of the following factors is most likely to affect the elasticity of demand for the doll?

Britney is fifteen years old and wants to open her own business selling cupcakes to local coffee shops and restaurants.She is having a tough time deciding whether to base her pricing objectives on market share,dollar sales,or unit sales.Regardless of which she chooses,her pricing objective can be categorized as:

If a product has high pricing power this would indicate a situation of:

One of the most stressful and pressure-filled tasks of the marketing manager is attempting to set the right price.Specify three aspects of the current pricing environment in consumer markets that have contributed to the difficulty in setting correct prices.

The price of the good or service is a key decision for a marketer because it most significantly and directly affects the product's:

Smelly Fruit At first glance there is little to like about the durian.The durian is a fruit popular in Thailand that is spiky outside and stinky on the inside.When confronted with the durian for the first time,the Wall Street Journal recently reported that westerners often describe its distinctive sulphurous smell with words like stinky socks and manure.However,the durian is so popular in Thailand that one variety of the durian fruit,called the Kan Yao,has been selling for as high as $200.Even at that price,supply of the Kan Yao cannot keep up with demand.There are approximately 30 varieties of the durian grown in Thailand,with the most plentiful selling in the $15 range.The yellow flesh of the durian,the part you eat,has very powerful smell,but possesses a sweet,nutty taste that Thais cannot seem to get enough of at any price. -Refer to Smelly Fruit.The durian fruit is a very unique product.To many Thai's no other fruit taste or smells anything like the durian.Its uniqueness,in the eyes of the customer,would tend to have which of the following?

Central Bark is a dog resort where pets are pampered.Which of the following is the BEST example of one of its fixed costs?

At Walmart,Randi saw a bag of daffodil flower bulbs and a box of plant fertilizer.The items,which were sold together,retailed at $28.50,but were marked down to $19.99.The $19.99 is the:

The only way to maximize profits is to reduce costs by operating more efficiently.

Patrick owns Liberty Tax and Bookkeeping Services.The monthly mortgage payment Patrick makes on his small office building and the annual cost of his business license are all examples of _____ costs.

What are the problems associated with the use of a cost-based pricing strategy? What contribution does cost make to the setting of prices?

The B2B Internet auction world is shifting from using warranties,delivery dates,and financing options as bargaining chips to haggling over prices.

Smelly Fruit At first glance there is little to like about the durian.The durian is a fruit popular in Thailand that is spiky outside and stinky on the inside.When confronted with the durian for the first time,the Wall Street Journal recently reported that westerners often describe its distinctive sulphurous smell with words like stinky socks and manure.However,the durian is so popular in Thailand that one variety of the durian fruit,called the Kan Yao,has been selling for as high as $200.Even at that price,supply of the Kan Yao cannot keep up with demand.There are approximately 30 varieties of the durian grown in Thailand,with the most plentiful selling in the $15 range.The yellow flesh of the durian,the part you eat,has very powerful smell,but possesses a sweet,nutty taste that Thais cannot seem to get enough of at any price. -Refer to Smelly Fruit.Over the past two years the price for Kan Yao durian fruit has increased by 50 percent.If the amount sold has remained almost constant,we would say that demand is: