Exam 12: Pricing Concepts and Management

To maintain market share and revenue in an increasingly price-sensitive market, companies have focused on quality, used labor-saving technologies, and used efficient manufacturing processes. These tactics have provided gains in productivity that have translated into ____ for the consumer.

Electricity is an example of a product that is price elastic.

The pricing strategy that assumes that demand is relatively inelastic over certain price ranges is called

In some cases, prices are assigned to goods on the basis of nothing more than custom.

Scenario 12.4 Use the following to answer the questions. Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services. After reviewing the previous three years' revenue, Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill. Glenwood's objective is to generate more income per customer on an annual basis. The hospital has previously priced its services by charging a flat fee for the office visit, a fee for each vaccine, and a fee for each type of examination beyond the basic office visit. Most customers pay the flat office fee and a fee for a rabies vaccine. Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit, the required rabies vaccine, and additional vaccines that prevent heartworm, kennel-cough, and fleas. Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program, rather than a one-time annual visit. Refer to Scenario 12.4. Glenwood's new pricing strategy is an example of ____ pricing.

The Palasi Candy Company is a small business located in the northeastern United States. The owner of Palasi Candy is calculating the projected costs for the coming year. There is rent for the building, salaries for the retail employees, raw materials of sugar, chocolate, and other ingredients, wrappers for packaging of individual pieces of candy, boxes, and radio advertising. Palasi's ______ are most likely to be the raw materials of sugar, chocolate, and other ingredients, as well as the wrappers.

Pricing strategies and methods

Ideally, pricing decisions have little relation to a firm's marketing objectives.

Some grocery stores collect data on competitive prices

How can a marketer use product quality as a pricing objective to influence purchasing decisions?

Markup is measured either as a percentage of ____ or a percentage of ____.

If Norelco introduced a new electric razor that sonically removes hair and priced it first at $175 and then at $150 before reducing the price to $100, the firm's initial pricing strategy is known as

Scenario 12.2 Use the following to answer the questions. The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China. Refer to Scenario 12.2. BASF is considering the problem of actual distance in delivering its product from the plant in Germany to some of its customers in China. Which pricing strategy would help overcome this problem?

Noncumulative discounts are one-time reductions in prices based on the number of units purchased, the dollar value of the order, or the product mix purchased.

A company trying to position itself as value oriented should not

A market share objective

Dividing the percentage change in quantity demanded by the percentage change in price gives the

The objective of maintaining or increasing market share depends on growth in industry sales.

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

Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is