Exam 14: Developing Pricing Strategies and Programs

The decline in the average cost of production with accumulated production experience is called the ________.

Explain the relationship between fixed costs,variable costs,total cost,and average cost.

In market-penetration pricing,the company's objective is to ________,believing that higher sales volume will lead to lower unit costs and higher long-run profits.

As a newly hired marketing associate,you have been given the responsibility to reduce the costs of your product by utilizing a process called "target costing." Explain how you would go about implementing a target costing program.

Predatory pricing-selling below cost with the intention of destroying competition-is legal under certain conditions.

If variable costs are $10 per unit,fixed costs are $300,000,and expected unit sales are 50,000,the unit cost is ________.

________ communicates to the market the company's intended value positioning of its product or brand.

If demand changes considerably,we say that the demand is ________.

The final price charged by the company does not necessarily have to take into account the brand's quality and advertising relative to competition.

Companies often raise their prices by more than the inflationary cost increases as preparation for further inflation or government price controls.This practice is known as ________.

Traditionally,________ has operated as the major determinant of buyer choice.

In a classic study,Farris and Reibstein examined the relationships among relative price,relative quality,and relative advertising for 227 consumer businesses.List and briefly explain their findings.

The demand for your product fell 66% when the price increased by 50%.This is an example of what type of demand

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.

How would you explain the concept of "price elasticity" to a co-worker

In large companies,pricing is typically set by the boss.

Companies sometimes initiate price cuts in a drive to dominate the market through lower costs.

All products have experienced heavy discounting in recent years.

Nonprofit organizations have the same pricing objectives as private enterprise.

A British aircraft manufacturer sold planes to Brazil for 70% cash and the rest in coffee.This is an example of ________.