Exam 20: Setting the Right Price

After establishing pricing goals,managers should estimate total revenue at a variety of prices.Next,they should _____.Only after performing this task are they are ready to estimate how much profit and how much market share can be earned at each possible price.

All of the following elements must be present for a pricing practice to be considered discriminatory under the Robinson-Patman Act EXCEPT:

What are consumer penalties? What two reasons do businesses give for requiring consumers to pay them?

Two effective pricing tactics,which can be used during a recession,to hold or build market share are:

The Used Car Mall lets salespeople charge different customers different prices for essentially the same automobile depending on how good the customer is at negotiating price.It uses:

South Africa's Competition Commission accused South African Airways of conspiring with its partner,Germany's Lufthansa,to set prices on flights between Cape Town,Johannesburg,and Frankfurt.As a result,the two airlines were charged with:

What is value-based pricing? What is the basic assumption marketers must make about their markets before implementing a value-based pricing strategy?

Acme Lawnmowers sells its mowers to retailers at different prices,depending on whether they are independent stores or members of a national chain.It uses:

Penetration pricing means higher profit per unit.

The 99-Center is a retail store where all of the merchandise is priced at 99 cents.This retailer uses:

A(n)_____ allows for price increases based on the cost-of-living index or some other formula.

If a marketer decides to price goods at odd-numbered dollar amounts to denote bargains and at even-numbered amounts to denote quality,he or she is using:

Sometimes multinational firms will follow a penetration strategy in developed countries and a skimming strategy in developing countries.

Why is there so much hype about Black Friday,why make it seem like the price point and the merchandise won't ever happen again?

Apple iPhone Apple,Inc.'s iPhone went on sale on June 29,2007.Apple's loyal and enthusiastic customer base is known for rushing to purchase its new products,and the iPhone enjoyed a tremendous amount of "buzz" before its introduction.As expected,the iPhone entered the market at what many believed to be a high price ($599).However,within weeks,the price was reduced to $399.By the end of 2007,over eight million iPhones had sold in the U.S.marketplace.By most,if not all measures,the original iPhone was a huge success for Apple,and its exclusive U.S.carrier was AT&T. On July 11,2008,Apple,Inc.released the iPhone 3G,which it advertised as being twice as fast as the original iPhone for half the cost.However,in order to obtain an iPhone at the new price of $199,buyers had to agree to a two-year service contract with AT&T.This contract would allow iPhone users to receive phone calls,receive e-mail,and search the Web on the same device.A single charge of $59.99 from AT&T included 450 minutes of cellular calls,with free nights and weekend minutes,unlimited data,visual voice mail,200 text messages,rollover minutes,and unlimited mobile-to-mobile service within the AT&T network.This approach succeeded,and over a million iPhone 3Gs were sold during the introductory weekend. -Refer to Apple iPhone.Samsung recently introduced its Instinct cellular phone,apparently to compete directly with the iPhone.If Samsung checked the price of the iPhone at the Apple Store and AT&T locations and then set the price of the Instinct to match the iPhone's price,it would be using a _____ pricing approach.

Toyota periodically offers customers _____,allowing purchasers to borrow money to pay for new cars without incurring an interest charge.

Black Friday discounting can best be defined by which of the following?

_____ are cash refunds given for the purchase of a product during a specific period.

Art Supplies It's September and Sophia wants to buy some arts and crafts supplies for an after-school program she is developing for her daughter's elementary school.In her Sunday newspaper was a flyer from Michaels,an arts and crafts retailer.As she looked through the newspaper insert,she noticed that if she purchased three or more bottles of Alene's Tacky Glue,the regular price of $1.50 each was reduced to $1.15 each.She also saw that the store priced its plastic storage boxes at $1.99,$3.99,and $5.99.She thought they would be useful for storing each child's projects.On the front page of the flyer was an ad for Funky Girls Gel Pens,something she knew her daughter would love to use.The price at Michael's was $6.99 lower than the price she had found at the other stores that carried the pens.She thought that some of the older girls might like to start a scrapbook and was pleased to find that Michaels had a scrapbook starter kit,which includes scissors,book,pages,and stickers for only $15.The items could be purchased separately for $19.99.The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent. -Refer to Art Supplies.What pricing practice was used to price the plastic storage boxes?

One example of price bundling occurs when Nintendo sells the Wii Fit balance board with the Wii game system at a lower price than the total price of each if bought separately.