Exam 21: Setting Prices

Services that are performed by lawyers, dentists, or doctors are typically priced using ____; sometimes these prices are not based on the amount of time that is spent in each situation, but are based on a flat fee regardless of the difficulty involved.

The price of a hotel room is more important to a business traveler than to a tourist.

A firm that considers costs and revenue secondary to competitors' prices when setting its own prices is using a competition-based pricing strategy.

The Office Place is an office supplies company who has just adjusted its price levels so that it can increase its sales volume to match its expenses. The Office Place is most likely employing a(n) ____ objective.

Research indicates that both market share and ____ are good indicators of profitability.

Describe the six steps of the process that marketers can use to establish prices.

Amtrak is considering two pricing strategies for its service. One is to price its train tickets so that it is less expensive to travel on weekends than during the week when there is heavy business travel, which illustrates ____ pricing. The second is to price its train tickets so that the further away the travel date, the greater the discount, which is best described as ___

Markup pricing is not used often by marketers because establishing a percentage markup greatly increases the complexity of the decision-making process.

Running a big sale in order to generate enough cash flow to pay creditors is typical in a situation in which a firm's primary pricing objective is

Captive pricing, premium pricing, bait pricing, and price lining are all strategies aimed at maximizing the profits of an entire product line rather than an individual product.

Marketers that evaluate competitors' prices do so to set their own prices slightly below those of competitors.

The newest version of a product like Bose headphones is likely to use _____, while the new version of Red Bull is likely to use _____ .

Cost-based pricing results in a high price when demand is high and a low price when demand is low.

If a business decides to reduce its prices once in a while on an unsystematic basis, it is using

A marketer is most likely to set prices according to a cash-flow objective when a

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's previous pricing strategy is an example of ____ pricing, while the new strategy is an example of ____ pricing.

When Gabriella logs on to Dell's website, she sees a notebook model priced well below $1,000. As she continues through the site to view the other options, she realizes the first one she saw was the cheapest model available, but she of course wants more features. Dell is utilizing

A marketer is usually in a better position to establish prices when it knows the prices charged for competing brands.

The six stages of setting prices should always be followed if prices are to be set correctly.

What are some issues to consider when determining a specific price?