Chat with AIExam 11: Pricing Concepts and Strategies: Establishing Value
Meg wants to start a gym in her hometown.Two other gyms already exist in the town.What kind of pricing method could she employ to establish herself?
(35) 
VerifiedStudent answers will vary.They should reference at least one of the following.
· Cost-based methods: As the name implies, cost-based pricing methods determine the final price to charge by starting with the cost.Cost-based methods do not recognize the role that consumers or competitors' prices play in the marketplace.Although relatively simple compared with other methods used to set prices, cost-based pricing requires that all costs can be identified and calculated on a per-unit basis.
· Competitor-based methods: Most firms know that consumers compare the prices of their products with the different product/price combinations that competitors offer.Thus, using a competitor-based pricing method, they may set their prices to reflect the way they want consumers to interpret their own prices relative to the competitors' offerings.
· Value-based methods: Value-based pricing methods include approaches to setting prices that focus on the overall value of the product offering as perceived by the consumer.Consumers determine value by comparing the benefits they expect the product to deliver with the sacrifice they will need to make to acquire the product.
A department store announces 30 percent off the price of Christmas trees if the trees are bought before December 1.This is an example of:
(35) VerifiedD
When consumers view the sale price and compare it with the provided external reference price, their perceptions of the value of the deal is likely to decrease.
(36) VerifiedFalse
A store that sells hockey equipment offers a discount if a customer also buys a pair of skates.The combined purchase costs less than it would cost the customer to buy the products individually.This is an example of:
(45) The expenses that change depending on production volume are called the:
(32) Consumers' ability to replace the focal brand with other products is called:
(44) Which of the following is true of pricing based on competitor-oriented strategies?
(43) Which of the following pricing methods focuses on the overall worth of the product offering as perceived by consumers, who compare it what they need to sacrifice in order to acquire the product?
(28) Amazon selling its Kindle product at a price lower than the cost in a hope that customers will choose Kindle over competitors and purchase eBooks later on.Amazon pricing objective in this case is most likely to be:
(35) A fall in the price of gas leads to an increased demand for cars in the market.In this context, gas and car are examples of:
(40) Those products whose demand curves are positively related, such that they rise or fall together, are called:
(29) Price is the only element of the marketing mix that generates revenue.
(31) Which of the following refers to those products that consumers purchase for status rather than functionality?
(39) Snails Inc., a 10-year-old bookstore situated in New York, recently launched an online store that offers uniform delivered pricing to all its customers across the globe.It also offers all the books from the previous year at a discount.Which of the following statements about Snails and its customers is true in this case?
(35) Which of the following, when presented by a consumer, provides him or her instant savings?
(32) Ryan owns a store that sells shoes and clothes.Explain how he could use price lining, price bundling, and leader pricing to attract customers.
(39) For price skimming to work, the product or service must offer consumers new benefits currently unavailable in alternative products.
(39) Firms concerned with the absolute level of profits are most likely to employ target return pricing.
(36) 
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