Exam 11: Pricing Concepts and Strategies: Establishing Value

Clove, a fitness centre, opens a new gym in Boston. Two gyms already exist around the same locality. To attract customers and drive its competitors out of business, Clove, offers a very low enrolment and monthly fee. The owners of the other gyms meet with the director of Clove to negotiate. Finally, all three gyms collude and decide to fix a standard enrolment and monthly fee that customers will have to pay. They also decide to charge a higher fee for men because they spend greater time in the gym. -All three gyms decide to charge a higher fee from men.This is an example of:

A home decor company in the United States delivers goods to its customers in Europe.The shipping company that delivers the goods to the customers has divided the continent into five different zones and charges according to the rate prevalent in each of these zones.This is an example of:

Which of the following occurs when only one firm provides the product or service in a particular industry?

The maximizing profits strategy primarily relies on:

Lee's, a department store, decides to promote its sales during Christmas. In the clothing section, it offers customized men's T-shirts for $11.99. To every customer who purchases a pair of shoes, the shoe department issues a document promising a discount of $20 on the customer's next shoe purchase. The store also has its air conditioners on sale at a reduced price because the sale of air conditioners is slow during the month of December and the company wants to get rid of its slow-moving merchandise. -The price reduction that Lee's offers for its air conditioners is an example of a:

As the number of tourists in a village increases during Christmas, the hotels in the locality temporarily increase the rates of accommodation to make profit.This is an example of:

A department store offers a discount if a shirt is purchased with a pair of trousers.The combined purchase would cost less than it would cost the customer to purchase the two individually.This is an example of:

A store that sells childrens' clothes reduces its prices drastically during promotional sales.This is an example of:

Break-even analysis for Joe's store -How many units should Joe sells to break even?

A company specializing in bathroom fittings offers state-of-the-art products.The products are highly priced, and the company is aware that sales will be limited.The main objective is to enhance its reputation and image and thereby increase the company's value in the minds of consumers.This is an example of:

Cost-based methods recognize the role that consumers or competitors' prices play in the marketplace.

A firm with a company objective that can be implemented by focusing on target return pricing is using a:

Jeff is a hockey player who uses hockey sticks manufactured by Teal Inc.Teal increases the price of hockey sticks, so Jeff switches to another brand offering the same quality of hockey sticks at a lower price.This change in brand is an example of the:

Break-even analysis for Joe's store -What is contribution per unit for Joe's store?

Two dairy farms supply milk to a local town.Both of them work together to control the price that the townspeople pay for milk.This is an example of:

When different companies sell commodity products that consumers perceive as substitutable, this is called:

Which of the following approaches attempts to reflect how a firm wants consumers to interpret its products relative to the offerings of rival companies?

Laws against bait and switch practices are difficult to enforce because salespeople, simply as a function of their jobs, are always trying to get customers to trade up to a higher- priced model without necessarily deliberately baiting them.

A computer store advertises to sell a particular laptop model at a discounted price.When a customer visits the store to purchase the discounted model, he is informed that it is out of stock.The salesperson then tries to sell him a different model that is priced higher than the model for which he had come.This action of the salesperson is an example of:

Lee's, a department store, decides to promote its sales during Christmas. In the clothing section, it offers customized men's T-shirts for $11.99. To every customer who purchases a pair of shoes, the shoe department issues a document promising a discount of $20 on the customer's next shoe purchase. The store also has its air conditioners on sale at a reduced price because the sale of air conditioners is slow during the month of December and the company wants to get rid of its slow-moving merchandise. -The document the shoe department gives to every customer who buys a pair of shoes is a: