Exam 14: Pricing Concepts for Establishing Value

Price elasticity of demand measures how changes in a price affect the quantity of the product demanded.

Joe's Deli is trying to compete with the local Subway store.When Subway offers lower prices on certain sandwiches during its "customer appreciation month," Joe's Deli reduces the price of its similar subs in order to compete.What pricing orientation is being utilized by Joe's Deli?

For which of the following is demand likely to be most sensitive to price increases?

Reese and Janelle own a boutique in the United States.Recently they took a trip to China and while there,the couple purchased a large quantity of name-brand handbags for a cost significantly lower than what the manufacturer charges for the same product in the United States.Upon their return,the couple sold the handbags in their store for less than any other store in the area.This is an example of what takes place in a(n)_______ market.

Customers must see value in a product or service before they are willing to exchange time or money to obtain it,but not all customers see the same value in a product.To analyze how many units will be sold at any given price point,marketers draw on

Managers of Wendy's fast-food restaurants keep track of prices at competitors such as McDonald's,Burger King,and Arby's,knowing that a decrease in the prices at these other fast-food restaurants will

Labor,materials,and energy are typically __________ costs.

In U.S.markets,there are many substitute products for Fruit Loops cereal,suggesting the price elasticity of demand for Fruit Loops is high.

In _______ many firms provide similar products that are considered substitutes for each other.

Sales of national brands of orange juice tend to increase when the economy is doing well,while sales of generic orange juice increase when the economy is not doing well.This is an example of how _______ impacts demand for products.

Sharon knew that her established customers liked her product much better than her competitor's.She was planning to expand into new markets,and she was considering pricing.She was leaning toward charging a higher price than competitors to help demonstrate that hers was a high-quality product.Sharon was considering

Rodi owns Hallman's auto repair service.He has observed over the years that customers keep their high-mileage cars longer when the economy is doing poorly,creating demand for his maintenance and repair service.Rodi has observed the impact of _______ on demand for his service.

A(n)_______ market legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer.

Diana owns a boutique specializing in ball gowns.Sales are stable and Diana feels it is time she had a 20 percent increase in her salary.If Diana takes this increase in compensation,it will decrease the break-even quantity of gowns she needs to sell on a monthly basis.

Price is the _____________ a consumer is willing to make to acquire a specific product or service.

At the break-even point,profits are maximized.

To discourage consumers from buying in gray markets,some manufacturers have

Gary is the marketing manager for an automobile dealership.His boss tells him the firm's primary goal is to increase its local market share from 15 to 30 percent.His firm is using a ________ orientation.

Bill is a yacht broker in the southeastern United States.For years he has had difficulty selling large yachts locally because there were few places to dock these boats.Yachts and spaces to dock them are an example of

Ryan gave the manager of his convenience store a set of binoculars so she could see the gasoline prices charged by the other convenience store at that intersection.Ryan told the manager to always match the gasoline prices of the other store.Ryan is using a _______ pricing strategy.