Exam 14: Developing Pricing Strategies and Programs

Baxter Healthcare,a leading medical products firm,was able to secure a contract for an information management system from Columbia/HCA,a leading health care provider,by guaranteeing the firm several million dollars in savings over an eight-year period.This is an example of ________.

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

Price discrimination in all forms is illegal in the United States.

Management need not consider how the marketing/distribution channels will react to its pricing policies.

Consumers ________ low-cost products or items they buy infrequently.

Identify and discuss the six steps of the pricing procedure.

Value pricing is not a matter of simply setting lower prices; it is a matter of reengineering the company's operations to become a low-cost producer without sacrificing quality and lowering prices significantly to attract a large number of ________ customers.

Florida hotels discount the cost of their hotel rooms during the hot summer months.On the other hand,during the winter months,the price of these rooms increases.This is an example of what type of discount

The formula for the break-even volume calculation is ________.

Many consumers use price as an indicator of ________.Image pricing is especially effective with ego-sensitive products such as perfumes and expensive cars.

As a small firm in a commodity industry,you are often faced with a pricing policy that can best be described as "going-rate pricing." Explain how this pricing policy works.

The Internet is largely a one-sided tool that benefits buyers,but not sellers.

What is experience-curve pricing and what risks does it carry

You are introducing a new product to the market; in fact,you are first with this new product to the marketplace.In developing your pricing strategy,it was decided that the price of the product should be at the maximum the market would bear.This is an example of what type of pricing strategy

When the seller receives full payment in cash and agrees to spend a substantial amount of the money in a country within a stated time period,this is called offset.

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

When a company initiates a price cut in an attempt to dominate the market through lower costs (such as the $1.00 special lunch menus at key fast-food restaurants),the company must ensure that it does not fall into certain low-cost traps.List these four "traps."

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

________ occurs when a company sells a product or service at two or more prices that do not reflect a proportional difference in costs.

________ is the result of a concentrated effort by designers,engineers,and purchasing agents to reduce the product's overall costs.