Exam 12: Pricing Concepts and Management

If General Motors determines that it wants to sell 200,000 Chevrolet Acadias and sets the price at $29,500 because it knows that at that price it will reach that goal, the firm would be using a ____ pricing method.

The use of market share as a pricing objective oversimplifies the value of price in contributing to profits.

Cost-plus pricing is popular in periods of rapid inflation.

Ryan orders 16 dozen fishing lures from Strike Right for $375. When he gets the invoice, he is furious that $25 in freight charges has been tacked onto his bill because he thought the price included freight costs. Ryan should have been certain that the order terms were

Marketers at organizations engaged in nonprice competition

Abby is marketing consultant who specializes in small businesses. Her current client is very interested in estimating the costs for the coming year, in order to find the breakeven point. Abby knows this is an important financial statistic because below the breakeven point, the firm is operating

____________ are reductions off the list price given by a producer to an intermediary for performing certain functions.

The holiday shopping season is a busy one for retailers and shoppers alike as retailers strive to offer a selection of products that shoppers will want to purchase as gifts for friends and family members. Some consumers might shop all throughout the year to gather the various gifts for friends and family members while the majority of shoppers will purchase items in a narrow window the three to four weeks before Christmas. Retailers face stiff competition for the consumer's gift purchasing business and may realize 40% to 50% of their annual sales during the holiday shopping frenzy. In order to attract more customers to their retail store, chains such as Target and Walmart advertise significant price reductions on desired items such as laptop computers, television sets, and gaming systems. More and more shoppers are anticipating these heavy discounts for the few days after Thanksgiving and especially on Black Friday and Cyber Monday and concentrate their holiday shopping on these days to maximize the discounts they could get when purchasing gifts. The holiday sales known as Black Friday and Cyber Monday are an example of the ______ strategy.

If Colgate-Palmolive wants to maximize profit on its toothpaste, it should operate at the point where

The objective of profit maximization is rarely operational because its achievement is difficult to measure.

Which of the following is true about the target market's evaluation of price?

Executives in Japan decided to price Lexus luxury cars in the United States at $55,000 while pricing them at $66,000 in their own country. This is an example of

Price skimming is designed to yield maximum unit sales volume.

Scenario 12.3 Use the following to answer the questions. Suppose that Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. Refer to Scenario 12.3. If Ray-Ban selected the prices for its new sunglasses to be $59.99 or $79.99, this would be an example of using ____ pricing in order to increase sales of the new line.

McDonald's restaurants have experienced declining sales recently due to consumers increased interest in healthy eating and their preference for fast-casual restaurants such as Chipotle and Noodles. In order to attract more customers to McDonald's, the chain expanded the number of items they are offering on the $1 menu and many of these items are priced below cost. McDonald's is most likely utilizing a _____ pricing objective.

Customers always interpret a higher price to mean higher quality.

Describe, compare, and contrast the three major bases for setting prices.

Which of the following products is most likely to have an inverted C-shaped demand curve?

The legality of uniform geographic pricing has been challenged, and so its use has been abandoned.

Which of the following statements about price elasticity is false ?