Exam 21: Setting Prices

The management at Allied Electronics is having difficulty in raising the introductory price on system components to cover the increased costs of producing the sensing devices for home security systems. Apparently, Allied used a(n) ____ strategy in pricing these components.

Under Armour is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales.

When a satellite dish company uses bundling to combine phone, dish, and broadband Internet access prices, it is attempting to influence a consumer's perception of price to make a product's price more attractive and reduce "sticker shock." This is an example of using a ____ pricing strategy.

Marketers must take steps to make sure that the pricing objectives they set are consistent with the organization's ____ objectives and ____ objectives.

Breyer's produces a variety of ice cream flavors and lines of varying qualities. The higher quality ice cream varieties are priced higher than the basic ones. Breyer's is using ____ to price its ice cream.

Which of the following pricing strategies often results in a retailer losing money on the product?

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

The fact that senior citizens are charged a lower price at movie theaters than younger adults is an example of ____ pricing.

Periodic discounting is often predictable so consumers wait to make purchases until they can benefit from the price reductions.

During July and August, Lakewood Links Golf Course, located in South Carolina, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of

Reference pricing is

How might a marketer find information about a competitor's prices? Why is this information important?

Explain differential pricing and then describe the four major types.

The effectiveness of demand-based pricing often depends on a marketer's ability to determine all the costs associated with the product.

Price skimming is designed to yield maximum unit sales volume.

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.

Competition-based pricing is important if competing products are almost homogeneous or if price is the key variable in the marketing strategy.

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

The three primary bases for developing prices are

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 is considering a markup pricing basis, with the cost for office visit plus vaccines at $45. If Glenwood were to add a markup of 33.3 percent of the costs, its price would be ____.