Exam 12: Pricing Concepts and Management

Which of the following statements about markup pricing is correct?

Theater goers in the Midwest were pleasantly surprised when they arrived at the cinema to see the latest release and learned that a price reduction had just gone into effect. The Wehrenberg Theater chain, which is the oldest theater company and operates in 15 Midwest locations, decided to drop matinee prices from $7.75 to $4.50 per person and reduce evening prices from $9.75 to $7.50 per person. The price decrease is a result of decreased traffic at the theater and a trend for consumers to use Netflix or Hulu to watch movies. The Starplex Cinemas operating in the same communities as Wehrenberg followed suit and reduced their prices to attract consumers as well. The two movie theater chains are utilizing the ______ pricing basis.

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

The owner of Big Bike Motorcycles is opening a new retail location. Which of the following is most likely to be a fixed cost for Big Bike Motorcycles?

Nicole is out shopping with her friends for the day. While evaluating a decision to purchase a handbag, she says, "People notice when you buy the most expensive brand of a product." Nicole is most likely a _____ consumer.

The Panama Jack Company utilizes a special strategy to sell its ECO-shirt line. Its basic promotional tool is the discount. These discounts offered to middlemen for performing certain channel activities are referred to as ____ discounts.

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

If a company provides price differentials that harm competition by giving one or more buyers a competitive advantage, it is committing

A marketer is usually in a better position to establish prices when it knows the prices charged for competing brands.

The amount of profit a channel member expects depends on

Nabisco is considering two pricing objectives. The first is to sell one out of every three crackers consumed in the world, an objective based on _______; the second is to meet, but not beat, competitor's prices of cookie products, which is a _____ objective.

The newest version of a product like Bose headphones is likely to use _____, while the new version of Red Bull is likely to use _____ .

Michelin notices that when the number of tires it sells increases from 1,000,000 to 1,000,001, total revenue rises $35. The $35 represents the firm's

Which of the following is not a major factor for firms making price decisions?

Suppose that the watchband department of Timex sells completed watchbands to the finished watch department. The finished watch department is charged the price it would have to pay an outside watchband manufacturer less a discount to reflect low sales and transportation costs. This method of pricing is called ____ pricing.

If a product is priced based on how many or how few people want it at a particular time and place, ____ pricing is being used.

You are a brand manager for a large chain of grocery stores. You have been working overtime for the last two weeks to prepare for your pricing objectives meeting with the head of sales and marketing. You walk into the meeting with a high degree of confidence in the strategy that you have for setting the pricing objectives for your brand category for the upcoming year. You are speechless when the marketing head tells you that no changes in the pricing objectives will be made for your brand category. He says he believes it is most prudent to leave the existing pricing objectives as they are for the upcoming year. Which of the following statements is the best explanation for the marketing head's decision to leave the existing pricing objectives in place with no change?

Pricing objectives should be considered overall goals to aid the organization in its long-range plans.

A measure of sensitivity of demand in relation to changes in price is

Grocery stores use negotiated pricing strategies.