Exam 10: Pricing: Understanding and Capturing Customer Value

In an effort to differentiate its offerings from its competitors, Pegasus Computers decided to add an extra USB port in all its laptops besides providing a free pair of Delphi power bass headphones with every Pegasus laptop. Although the additional features increased the price of the laptops by $500, Pegasus was confident that the strategy would help boost demand for its laptops substantially. This is an example of ________.

Developing an effective integrated marketing mix program involves coordinating price decisions with product design, promotion, and ________ decisions.

The simplest pricing method is cost-plus pricing, which involves adding a standard markup to the cost of the product.

Cost-based pricing involves setting prices based on consumer perception of value.

If demand is elastic rather than inelastic, sellers will consider lowering their prices.

Good-value pricing usually is used by premium brands, and rarely by less-expensive brands.

Internal factors affecting pricing include the company's overall marketing strategy, objectives, and marketing mix.

Price is the most inflexible of the marketing mix elements.

The experience curve reveals that ________.

Briefly discuss monopolistic competition.

Explain the concept of the price floor.

Markup pricing is popular because when all firms in the industry use this pricing method, prices tend to be similar, so price competition is minimized.

What is a pure monopoly?

Departments or managers that have an influence on pricing include sales managers, finance managers, accountants, and ________.

What sets the floor for product prices?

Which of the following is most likely a risk associated with experience-curve pricing?

Value-based pricing uses the sellers' perception of value as the key to pricing.

To take advantage of a downward-sloping experience curve, a company must do all of the following EXCEPT ________.

If demand changes greatly with a small change in price, the demand is ________.

PoolPak produces climate-control systems for large swimming pools. The company's customers are more concerned about service support for maintaining their systems than the initial price of the product. PoolPak specializes in and differentiates itself through both cutting-edge technologies used to build its high-value climate control systems as well as seamless quality service. PoolPak's prices are very high, but demand for its climate-control systems seems to be forever on the rise. This exemplifies ________.