Exam 13: B: Creating and Pricing Products That Satisfy Customers

The strategy of developing a large market share for a new product by setting a very low price is called penetration pricing.

Costs that depend on the number of units produced are called variable costs.

Entirely new products are innovations.

The breakeven quantity is the number of units that must be sold to equal the projected total revenue for the period.

Pricing strategies act as guides for achieving pricing objectives.

Manufacturers, wholesalers, and retailers do not use negotiated pricing strategies.

In the decline life-cycle stage of a product, less profitable versions of the product are sold at reduced rates to cut losses.

Competition-based pricing is important if competing products are similar and the organization is serving markets in which price is the crucial variable of the marketing strategy.

A product cannot perform its function if it is priced incorrectly.

Craftsman and Kenmore are examples of a store brand.

A price of $5.95 for a product would fall into the category of odd-number pricing.

Fixed costs are costs that depend on the number of units produced.

New products are often immediate successes.

Differential pricing means different buyers pay different prices for the same quality and quantity of a product.

Some pricing objectives include surviving, maximizing profit, obtaining market- share goals, and maintaining status quo.

Packages have marketing value but no functional value.

A company wanting to maximize profits from its new product would use product-line pricing.

Screening ideas for feasibility is the first stage of the new product development process.

Three types of product-line pricing are price leaders, special-event pricing, and comparison discounting.

Once it becomes effective, a product mix for a given product remains effective for a long time.