Exam 21: Developing and Applying a Pricing Strategy

If a firm exceeds its target market's price ceiling for a product, consumers will most likely

The profitability of a leader pricing strategy should be computed solely on the basis of the profits generated from the items that are price leaders.

In modified break-even analysis, the price elasticity of demand is always elastic.

List five specific symptoms of a poor pricing strategy. Explain how each symptom could be addressed by using a revised pricing strategy.

A local full-service furniture wholesaler usually deals with price-conscious interior decorators who do not desire such services as delivery and extended warranties. The wholesaler should consider the use of

A firm's contract calls for it to receive 15 percent of total costs as a profit (using the cost-plus pricing technique). If total costs are $300,000 and the firm sells 10,000 units, its price is

There is relatively little incentive for a service provider to improve its efficiency if it uses cost-plus pricing.

The major objective of leader pricing is to

The mix of price-quantity combinations that produces the highest level of revenues for a given time is determined through

Price ceilings are computed in cost-based price strategies.

Many firms first use skimming prices and then apply penetration pricing. An advantage of this strategy is that

Differences in personal selling costs among products are reflected in a

A blender manufacturer with excess capacity has analyzed its costs and found that the lowest price it can accept for a major order (and still attain its profit goal) is $10 per unit. This illustrates

According to the expected profit concept, as a firm's bid price increases, its profit and the probability of its winning a contract decreases.

A channel member sets its prices and seeks to maintain them over an extended time period with ___ pricing.

A wholesaler wanting to minimize the impact of a discounter selling gray market goods should use ___-based pricing objectives.

A firm has total fixed costs of $60,000 and a profit goal of $40,000. If variable costs per unit are 40 percent of its selling price, the profit goal will be reached if sales are at least $140,000.

Product-based price discrimination could be used as long as

After the innovator segment of the marketplace is saturated, a low price can be used to appeal to the mass market. This strategy illustrates

With which form of geographic pricing does the buyer select the transportation form and pay all freight charges?