Exam 9: Pricing: Capturing Customer Value

Hotline Long Distance Service uses captive-product pricing for its phone call charges.Because this is a service,the price is broken into a fixed rate plus a per-call ________.

When entering a new market,a highly competitive discount retail chain often cuts prices so deeply that it sells at below its cost,effectively pushing smaller companies with less purchasing power out of the market.The firm is at risk of being accused of ________.

A manufacturer offers 3 / 10,net 30,terms to a wholesaler for a recent purchase.Under these terms,the wholesaler may deduct ________ per cent if the bill is paid within ________ days.

Environmental elements that affect pricing decisions are categorised as external factors.

Changes in the value of local currency could result in ___ when the product is sold in another country.

Under ________,the market consists of a few sellers who are highly sensitive to each other's pricing and marketing strategies.

________ costs are those that vary directly with the level of production or service provision.

Product costs set a(n)________ to a product's price.

In the printer and cartridge market,key challengers are unable to undercut the very low prices offered by the market leader,Hewlett Packard (HP).However,HP charges relatively high prices for replacement cartridges ($50-$80 each).In an effort to gain ground in this highly competitive market,Canon,using the insight that customers resented the high prices of printer cartridges,saw an opportunity to compete on prices for ink-jet cartridges and came up with a very fair offer of $12 per cartridge.Both Hewlett Packard and Canon face which type of pricing situation?

Deceptive pricing occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers.

A steam cleaning firms offers to clean the carpet in three rooms for a low basic price of $100 as a means of attracting customers.The company intends to make money by selling extras,such as cleaning chairs,sofas,rugs,curtains and cleaning additional rooms.This is an example of ________ pricing.

Value-based pricing is the reverse of cost-based pricing.

________ pricing involves setting prices based on the costs for producing,distributing and selling the product,plus a target profit.

A quantity discount is a price reduction to buyers who purchase ________.

When amusement parks and movie theatres charge admission plus fees for food and other attractions,they are following a(n)________ pricing strategy.

________ costs are those that do not vary with production or sales levels.

Market-________ pricing involves setting a high price for a new product in order to create fewer but more profitable sales.

Provide relevant,non-text book examples of products for which marketers may use the following: (i) optional-product pricing (ii) captive-product pricing (iii) two-part pricing (iv) price bundling

Market-skimming pricing is practiced by companies that set a low initial price in order to get their 'foot in the door' quickly and deeply,attract a large number of buyers quickly and win a large market share.

In a pure monopoly,the market consists of one seller.