Exam 19: Setting the Right Price

Price discrimination can sometimes be justified.

It makes the most sense to use price skimming as a pricing policy when supply is greater than demand.

An Internet picture frame manufacturer offers retailers reduced prices on any combination of size or style frames purchased.The discount is shown as they shop and adjusted as the quantity of frames purchased increases.What common form of purchase discount is the frame manufacturer using?

Delayed-quotation pricing does which of the following?

Shipping fresh-cut flowers to international buyers can be risky because of price changes during the time required for shipment,expense incurred over long distances,and quality of product delivered.To minimize risks and costs,what would a seller likely employ?

If an item purchased under FOB origin terms is damaged in truck transit,against whom can the purchaser file its damage claim?

Nellie Tompkins is the owner and operator of Hot Mamma Salsa,which she sells at craft festivals.She makes and sells only three types of salsa-peach,pear,and pineapple salsa.The joint costs of leasing her professional kitchen for manufacturing,travel to craft shows,insurance,and so on are allocated on an equal basis to the three types of salsas sold.Last year's sales figures and allocated joint costs follow.Should Hot Mamma Salsa stop selling its pear salsa? Why or why not?

A penetration strategy tends to be effective in a price-sensitive market.What is one of the purposes of penetration pricing?

The introductory price for the Nintendo Gamecube video game console was $100 lower than the list price of Xbox and Playstation 2,its only two competitors.Given this information,you can assume Nintendo used which type of policy for its Gamecube?

Why is price lining is a valuable tactic for marketing managers?

What are two effective pricing tactics that can be used during a recession to hold or build market share?

Eustis Lee is a lawyer who handles only drinking and driving cases.No matter how quickly he resolves the case,he charges each customer $5,000.Lee justifies the fee because of his lengthy education and the years he has spent learning how the judicial system operates.Which pricing policy is the lawyer using?

All pricing objectives have trade-offs that managers must weigh.

When does a penetration pricing strategy tend to be most effective?

Which type of discount is a deduction from list prices that is aimed at encouraging customer loyalty?

When the salesperson from R.W.Hunt & Sons,a distributor of rifles and other items needed for hunting or target practice,calls on retail sporting goods stores,she is authorized to offer the retailers a 15 percent discount from the list price in recognition of activities retailers perform for the distributor.These activities include unpacking,floor display setup,and a repair service.What is this 15 percent reduction called?

If a company decides to divide its market area into segments or regions and charge a flat rate for freight to all customers in a given region,which type of pricing is the company using?

Super-Sav supermarket employees regularly shop at other local supermarkets in order to make certain that Super-Sav is charging prices comparable to the other supermarkets.What type of pricing strategy is Super-Sav using?

South Africa's Competition Commission accused South African Airways of conspiring with its partner,Germany's Lufthansa,to set prices on flights between Cape Town,Johannesburg,and Frankfurt.As a result,what were the two airlines charged with?

Some restaurants have early bird specials early in the evening when they sell meals for less than during peak times.What is this example of?