Exam 11: Pricing Decisions: Objectives, Strategies and Tactics

Olivia has calculated the total cost of the product she manages. She has reviewed the company's marketing plan and determined the required level of profit that must be earned on the sale of each item. Olivia is using which pricing method?

You have selected an electric drill from a hardware store for purchase and notice that there are two price tags on it. The hardware store must charge the lower of the two prices.

BMW would use a penetration pricing strategy when introducing a new model.

Consider this situation: Molson raises the price of a case of beer by $2.00 and Labatt follows suit. Consumers tolerate such an increase and purchase the same quantities of beer as before. In this case, demand is

Which of the following pricing strategies is best suited for a digital video disc player that has elastic demand and a lot of competition?

A firm that has realized production efficiencies through economies of scale could successfully launch a new product using a price penetration strategy.

Raw materials costs are variable costs.

A temporary price discount in the form of a cash return made directly to a consumer by a manufacturer is called a

Reducing the size of a bag of chips is an example of the cost reduction principle.

A uniform delivered price penalizes a nearby customer in terms of the total price paid for a product.

Canadian Tire promoted a sale on a particular series of lawn mowers. However, through no fault of the retailer, the supplier short shipped them and there are insufficient mowers to meet demand. There are numerous other, more expensive models in the retailer's stores. Which of the following would you recommend the retailer do to resolve this problem legally?

Forward pricing

A not-for-profit organization will use a full-cost pricing strategy.

Breakeven analysis is only useful for determining the worst-case scenario. It cannot help with pricing for profit.

If freight costs are averaged into the price charged by the seller so that all customers pay it, the seller is using

A large pizza chain moved into a small town and offered a prolonged promotion on their pizza. This severely affected the local small family-owned pizza place. Could there be a legal issue? What would it be? Explain.

Which of the following best characterizes odd-even pricing?

Define "fixed costs"and "variable costs."Assume you are working for a manufacturer of cookies. Give an example of a fixed cost and a variable cost that you would need to consider when making pricing decisions.

A manufacturer of household products gives a distributor ________ when it sets the manufacturer's in-store display in a prominent location.

A firm that uses backward pricing first determines the price consumers are willing to accept.