Exam 16: Pricing Objectives and Policies

Which of the following is a status quo oriented pricing objective?

A firm should not simply assume that its profits will grow if its sales grow.

Calumet Pottery Supply allows a 10 percent reduction off its list price of Jepson clay whenever an intermediary orders more than 100 cases in one shipment. This is a:

In an oligopoly situation, a wise marketing manager will probably set the firm's price level:

A retailer might expect a stocking allowance:

Most firms operate in monopolistic competition instead of pure competition.

Quantity discounts are discounts offered to encourage

Roberto, the marketing manager of Absola Foods Co., a food processing company, reduces the prices of the firm's line of breakfast cereals in an attempt to increase the number of products sold. However, contrary to Roberto's prediction, sales of the breakfast cereals drop, and upon further investigation, Roberto discovers that the company's target consumers are buying more expensive competitor brands instead of Absola food products. Which of the following could be a possible explanation for this?

Which of the following is LEAST LIKELY to be in the "Something of Value" part of the "price equation" for CHANNEL MEMBERS?

"Don't-rock-the-boat" thinking is most common when

Recently, some executives for highway construction companies agreed to stop competing with each other on price and to meet every three months to decide their price for the next quarter. In this situation:

A flexible-price policy is most often used where products are not standardized and where bargaining is common.

Use this information for question that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company. At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase it to 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3% reduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2% of the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and not start a price war. Digital Imaging offers customers an 8% discount if their purchases exceed $20,000 a year. Jack's One Hour Cleaners recently opened for business. The company invested a lot of money in new equipment, and feels that it has to quickly get "at least 10% market share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20% discounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product, the Gutenberg NP201, with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. Regarding freight charges for its equipment, NPE's invoice reads, "Seller pays the cost of loading equipment onto a common carrier. At the point of loading, title to such products passes to the buyer, who assumes responsibility for damage in transit, except as covered by the transportation agency." Which business offers a CUMULATIVE quantity discount?

White Sands Heavy Equipment Co. produces industrial equipment that it sells through its national sales force. Its sales reps often must negotiate with customers to match the low prices of foreign competitors. Apparently, the firm has

A profit maximization pricing objective

A jewelry store advertises a one-carat diamond engagement ring as being discounted 50 percent off the original price of $10,000, for a sale price of $5,000. However, the ring was never put on sale at the original price, and its actual cost to the retailer was only $1,500. This jewelry store could be accused of using:

Which of the following is the primary difference between introductory price dealing and low penetration price policy?

Which of the following pricing objectives is a producer seeking when the producer tries to obtain some percent return on his investment?

Which of the following observations is true of a mature market?

Genetech Corp. has invested heavily to develop a patented new product. Genetech wants to achieve a rapid return on its investment. It probably should set a ______________ pricing objective.