Exam 20: Pricing Concepts

Scenario 20.2 Use the following to answer the questions. The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China. -Refer to Scenario 20.2. If BASF were to employ pricing that includes the price at the factory plus freight charges from a chosen point nearest the buyer, this would be an example of ____ pricing.

The Highland Racquet Club found that with annual fixed costs of $60,000, its breakeven point is 2,000 members when the membership charge is $60 per person per year. What is the variable cost per person for Highland?

Price is a crucial marketing mix component.

Because buyers have unlimited purchasing power, they do not have to allocate it to the most desired products.

The owner of Big Bike Motorcycles is opening a new retail location. Which of the following is most likely to be a fixed cost for Big Bike Motorcycles?

To gain market share, when Hyundai first entered the U.S. car market it did so with a comparatively low pricing strategy. One of the negative side effects of making this pricing decision is

If Colgate-Palmolive wants to maximize profit on its toothpaste, it should operate at the point where

Comparison of various prices and various breakeven points will tell the marketer exactly what price to charge.

A graph of the quantity of products marketers expect to sell at various prices if other factors remain constant is a

What assumption does breakeven analysis make that limits its overall usefulness?

Marginal revenue is the change in total revenue that occurs when a firm sells an additional unit of product.

Scenario 20.1 Use the following to answer the questions. Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6. -Refer to Scenario 20.1. If Concession Supply increased its price by 10 percent and experienced only a 2 percent decrease in the demand for hotdogs, the demand would be

Which of the following prohibits price discrimination that lessens competition among wholesalers and retailers?

The fact that a gas station in Texas pays less for fuel than a gas station in Maine from a producer in Louisiana suggests that refineries are using which of the following pricing methods?

Nonprice competition emphasizes distinctive product features, service, and product quality.

Price is

Vanessa is shopping for a new pair of athletic shoes. Since she is concerned about both the price and the quality aspects of a product, Vanessa is most likely a ___ consumer.

French Quarter Inns drops the price of a suite from $225 to $195 per night and experiences a reduction in the quantity of rooms demanded of an average of five per night. This is an indication that suites at this hotel are apparently an example of a(n) ____ product.

Ideally, pricing decisions have little relation to a firm's marketing objectives.

Rent is usually a fixed cost.