Exam 14: Developing Pricing Strategies and Programs

The best response to competitors' price changes is to panic and lower prices in order to regain market share.

A firm must set a price for the first time when it develops a new product, when it introduces its regular product into a new distribution channel or geographical area, and when it ________.

Today's companies try to adapt their offers and terms to different buyers. ________ accounting tries to identify the real costs associated with serving each customer. It allocates indirect costs to the activities that use them and are tagged back to each customer.

As the marketing manager for a "brand leader" in your industry, you noticed that a competitor has just reduced his prices by 15 percent on his number one selling product. In a memo to your boss, you must outline how (or if you wish to) respond to this latest threat. In creating your letter, you outline three possible response alternatives that are available to you. These three responses are?

If the company has determined that the price for its product is "less elastic," then one or more of the following conditions must exist. List these conditions for a product to have an inelastic demand.

Some brands adopt scarcity as a means to signify quality and justify

Your company has recently sold its resin producing plant in India to a local concern. As part of the sales price, your company agrees to accept as partial payment the production of the resin at an agreed upon price for six years. This is an example of what type of countertrade?

Companies price their products in a number of ways. Small companies prices are set by the boss, in larger companies, pricing is handled by division and product-line managers. In industries where price is a key factor, companies often establish a ________ department reporting to other internal departments.

If demand changes considerably with a small change in price, we say that the demand is elastic.

Manufacturing costs such as rent, utilities, interest expense, and some salaries are considered ________ and these costs do not vary with the production or sale of the item.

Your competitor has reduced prices on his entire line of products. You can interpret these price cuts by assuming that your competitor is trying to gain market share, that the competitor is doing poorly and wants to increase revenue quickly, and that

In attempt to "rein in" the continued discounting by the sales force, you implement a net price analysis program to arrive at the "real price" of your products. Describe the steps necessary to implement such a program.

Evian prices a 1.4-litre bottle of its mineral water at $.200 and 50 mL of the same water in a moisturizer spray at $6.00. With which of the following types of pricing are different versions of the product priced differently but not proportionately to their respective costs?

Following the industry average, your firm accepts a 20 percent markup on sales. If the unit cost of your product is $20.00 then the retail price would be

Research on reference prices has found that "unpleasant surprises can have a ________ impact on purchase likelihood than pleasant surprises.

One marketing strategy that can be used to avoid raising prices is to shrink the amount of product.

The quantity demanded of your firm's product increased only 5 percent when the price of each unit was reduced by 33 percent. This is an example of what type of demand?

Market-skimming prices make sense under which of the following conditions?

Activity-based cost is just another method to distribute attributable costs across the product line.

In exchange for the distribution of your products overseas, your firm has accepted to receive a shipment of imported products in trade. This is an example of what type of countertrade?