Exam 10: Managing Price and Customer Cost Perceptions

Eduardo and David have developed a unique gaming accessory and are determining how to price it. Their market analysis has told them the accessory will appeal to a large number of gamers, it is relatively inexpensive to produce, and they already are thinking about how they could enhance the accessory to make it even more attractive. What kind of pricing strategy should they use?

An approach services use to set prices according to changing market conditions is known as

To be financially successful, companies must also consider their own costs when setting

When a new product is introduced to a market and is priced high with the intention of eventually lowering the price as the market becomes more competitive, marketers are using a pricing strategy known as

While consumers gain from artificially low prices in predatory pricing and price wars, they are harmed by the illegal practice of price-fixing.

A significant disadvantage of cost-based pricing is that it is difficult to get accurate information about what customers would consider the true price.

___________ is one of the most difficult decisions in the marketing mix, since it directly influences customer perceptions of value.

Catherine had calculated and was using a set of prices to market her product line of baking pans and related items. Midway through the year, a competitor introduces an imported product line of comparable products at a much lower price. Catherine does not want to start a price war, but she knows she must respond. To determine what pricing options she has, she will need to re-examine all of the calculations she made. Which factors can she consider changing and which will remain the same?

Price wars are usually harmful to firms because non-loyal customers will switch to whichever product has a lower price, and loyal customers

Ming-tao was trying to figure out how much revenue he would have to bring in on a specific product to start earning a profit. He wanted to know the point at which the total sales at a given price level needed to produce zero profits, but cover costs. To determine the this, he needs to know the fixed costs and

Damon is developing a marketing plan for the product he is managing. What calculation will he use to determine how many incremental sales he will have to make if he increases advertising efforts by three different amounts?

Identify and discuss three of the six steps of the price-setting process.

Elastic demand characterizes discretionary items where a small change in the price of the items will have a noticeable effect on the number sold.

All of the following are marketing costs that are considered fixed costs, EXCEPT

How a price is presented can also influence customer price

Price is a measure of the relative value of an item for both the customer and the ___________.

Identify and describe common adjustments to price that are used by marketers. Provide an example of each.

_________ change with quantity sold and are generally tied to the product sold.

Maya is setting prices for her home remodeling business. Over the course of the year, there are times of peak activities-such as pre-holidays-and times when consumers were not as interested in home remodeling. This is an issue throughout the industry, so she knows it isn't just her business. After she determines a base price for the service, she could stimulate demand during the slow periods by using

An expectation about the price of a given product is known as