Exam 21: Setting Prices

Scenario 21.1 Use the following to answer the questions. Suppose that Ray-Ban is considering a new line of sunglasses that would be sold in major department stores.The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores,and would be priced higher than other brands in the store,but a lower price line than the current Ray-Ban lines that are sold through more selective stores.In determining the price for this sunglass line,Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. -Refer to Scenario 21.1.Given Ray-Ban's plan for positioning the new sunglass line,they should use a ____ strategy when introducing their new product.

Penetration pricing and price skimming of the market are two types of new-product pricing.

Marketers that evaluate competitors' prices do so to set their own prices slightly below those of competitors.

A marketer uses only one pricing objective to avoid organizational confusion.

Explain differential pricing and then describe the four major types.

The pricing of Clinique makeup considerably higher than brands such as Cover Girl,Revlon,and Maybelline is used to communicate ____,which is the company's primary pricing objective.

Scenario 21.2 Use the following to answer the questions. Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services.After reviewing the previous three years' revenue,Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill.Glenwood's objective is to generate more income per customer on an annual basis.The hospital has previously priced its services by charging a flat fee for the office visit,a fee for each vaccine,and a fee for each type of examination beyond the basic office visit.Most customers pay the flat office fee and a fee for a rabies vaccine.Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit,the required rabies vaccine,and additional vaccines that prevent heartworm,kennel-cough,and fleas.Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program,rather than a one-time annual visit. -Refer to Scenario 21.2.Glenwood has decided that it is going to offer a special package offer if the prevention plan is purchased within the first 30 days of each year's time for vaccinations.This type of pricing strategy would be an example of

A firm that considers costs and revenue secondary to competitors' prices when setting its own prices is using a competition-based pricing strategy.

The role played by attitudes toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market.

The newest version of a product like Bose headphones is likely to use _____,while the new version of Red Bull is likely to use _____ .

What are some of the objectives a firm might hope to achieve when setting prices?

If Samsung uses _____ pricing for its newest version of laptops,it is probably most interested in obtaining market share;and it is assuming

Products such as light bulbs,canned soft drinks,and ice cream sandwiches are usually priced using ______ usually resulting in a ____

Prestige pricing is used when a higher price is consistent with buyers' attitudes toward the quality or image of a product.

Reference pricing is

Pricing the basic product in a product line low while pricing related items at a higher level is called

Markup pricing is not used often by marketers because establishing a percentage markup greatly increases the complexity of the decision-making process.

A marketer is most likely to set prices according to a cash-flow objective when a

Pricing objectives should be considered overall goals to aid the organization in its long-range plans.

Price leaders,comparison discounting,and special-event pricing are applications of