Exam 21: Setting Prices

Grocery stores that position their less expensive, private brands next to more expensive, well-known manufacturer brands on the shelf are using the concept of reference pricing.

Chris is planning three sales during the third quarter of the year at Toys R' Us. The first is at the beginning of the school year, the second is the week before Halloween, and the third is Black Friday. These sales would be considered to be

To attract customers into a store, Safeway advertises its milk at less than cost, hoping that customers will purchase other groceries as well. This pricing strategy is called

When an organization sets a number of prices for selected groups of merchandise, this is commonly referred to as

Executives in Japan decided to price Lexus luxury cars in the United States at $55,000 while pricing them at $66,000 in their own country. This is an example of

The government frequently uses competition-based pricing in granting defense contracts.

If Norelco introduced a new electric razor that sonically removes hair and priced it first at $175 and then at $150 before reducing the price to $100, the firm's initial pricing strategy is known as

Cost-plus pricing is popular in periods of rapid inflation.

The objective of profit maximization is rarely operational because its achievement is difficult to measure.

The use of price skimming discourages competitors from entering a market.

If Nabisco wants to quickly gain a large market share with its new line of reduced-fat snack crackers, it should use

Random discounting means discounting various products on a systematic basis.

A retailer of Real Dry deodorant prices it at $2.00; it costs the retailer $1.40. What is the approximate markup as a percentage of selling price?

The pricing of Clinique makeup considerably higher than brands such as Cover Girl, Revlon, and Maybelline is used to communicate ____, which is the company's primary pricing objective.

Companies that focus on particular product categories and rely on everyday low pricing to acquire a large market share through aggressive and competitive pricing strategies are often referred to as

What are some of the objectives a firm might hope to achieve when setting prices?

Gambrell Designs thinks its new product, the Automatic Dog Walker, will have a short product life cycle; therefore, its marketing department sets its primary pricing objective as

A penetration pricing strategy is particularly appropriate when demand is

Compare and contrast price skimming and penetration pricing.

Lexmark sells some of its color printers for about $100, but the refill cartridges cost over $30 each. Lexmark's pricing strategy would be best labeled as