Exam 19: Pricing Concepts

Stone Restaurant,a newly opened restaurant,was unable to attract a lot of customers.Since the owner of the restaurant had to pay the loan amount that he had taken to start the restaurant,he decided to implement a strategy that would help him attract more customers.He offered about 20 percent discount on all the dishes on the menu on weekends.This strategy,he thought,would help him earn enough to be able to make the loan payment.In this case,the owner's pricing objective can be classified as:

Manufacturers find that their large customers such as department stores often make specific pricing demands that the suppliers must agree to.

As products enter the growth stage of the product life cycle,prices generally begin to stabilize.

Which of the following statements is true of price lines?

During off-season,the Rues Hotel offers a 25 percent reduction on its rooms to attract guests.Given this information,which of the following is illustrated in this scenario?

Status quo pricing is a pricing objective that maintains existing prices or meets the competition's prices.

Define consumer penalty and give reasons for imposing consumer penalties.

According to garment makers,the demands of large customers are nearly wiping out profits for all but the very large suppliers.

_____ is a price tactic that tries to get consumers into a store through false or misleading price advertising and then uses high-pressure selling to persuade consumers to buy more expensive merchandise.

During the maturity stage of product life cycle,distribution channels become a significant cost factor.

Pricesalwayssteadilydeclineforaproductinthedeclinestageoftheproductlifecycle.

Profit-oriented pricing objectives include:

Identify a true statement about yield management systems.

Discuss the role of price in the evaluation of product alternatives.

Explain the relationship between price and quality of a product that affects a purchase decision.

_____ is sometimes called a "market-plus" approach to pricing because it denotes a high price relative to the prices of competing products.

Price is often used as a promotional tool to increase consumer interest.

A _____ is a price reduction offered to buyers buying in multiple units or above a specified dollar amount.

Psychological pricing is marketing two or more products in a single package for a special price.

At a local supermarket,Linda saw a box of plant fertilizer that was retailed at $25 but was marked down to $20.99.Given this information,$20.99 is the: