Exam 12: Pricing Concepts and Management

Maintaining a certain market share, meeting competitors' prices, maintaining a favorable image, and achieving price stability are all associated with a ____ pricing objective.

You are the head of pricing strategy for your firm, and you are very excited about a new point-of-sale system that has just been installed in all your firm's retail outlets. The system is a state-of-the-art, real-time information system that captures the details of every sale made in your retail outlets. Now you will have up-to-the-minute data on sales volume trends and performances for your entire product line. You plan to use this data to set prices based on these volume trends. Which of the following bases for pricing are you intending to use?

Target released a promotional campaign with the tagline, "Expect more. Pay less." Which of the following pricing strategies is Target most likely using?

Periodic discounting is often predictable so consumers wait to make purchases until they can benefit from the price reductions.

What are some of the objectives a firm might hope to achieve when setting prices?

Le Meridien, Inc. has an objective of achieving a 25% return from its overall sales. This is an example of a ____ pricing objective.

Theatergoers in the Midwest were pleasantly surprised when they arrived at the cinema to see the latest release and learned that a price reduction had just gone into effect. The Wehrenberg Theater chain, which is the oldest theater company and operates in 15 Midwest locations, decided to drop matinee prices from $7.75 to $4.50 per person and reduce evening prices from $9.75 to $7.50 per person. The price decrease is a result of decreased traffic at the theater and a trend for consumers to use Netflix or Hulu to watch movies. The Starplex Cinemas operating in the same communities as Wehrenberg followed suit and reduced their prices to attract consumers as well. The two movie theater chains are utilizing the ______ pricing basis.

The local florist advertises a discount on arrangements during the month of April because the anniversary of the store's opening is in April. This is an example of special-event pricing.

When products in an industry are relatively homogeneous and price is a key purchase consideration,

What is bundle pricing? Give three examples, each one from a different industry.

Markup is measured either as a percentage of ____ or a percentage of ____.

Nate is an operations unit manager for Morningstar Foods. So far in developing his monthly budget, he has identified the following costs: overhead at $120,000; packaging at $70,000; advertising at $60,000; salaries at $400,000; food production at $90,000; and distribution at $22,000. The fixed costs in this situation would be

A product that has more features than those of its competition, or that is perceived to be of higher quality, warrants using which type of pricing strategy?

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

A major reason why retailers use markup pricing is that it is convenient.

A firm that considers costs and revenue secondary to competitors' prices when setting its own prices is using a competition-based pricing strategy.

The owner of Mega Motor Bikes is opening a new retail location. Which of the following is most likely to be a fixed cost for Mega Motor Bikes?

What type of discount is given to a business purchaser for performing activities such as transporting, storing, and selling?

Which type of pricing objective can reduce a firm's risk by helping to stabilize demand for its products?

Knowing the number of units necessary to break even is important in setting the price.