Exam 14: Pricing Concepts for Establishing Value

Julia's is an upscale women's clothing store. Prices are based on customers' beliefs about the value of the clothing. The store focuses on a limited target market and provides excellent customer service. Julia's is using a ________________ pricing strategy.

To discourage consumers from buying in gray markets, some manufacturers have

At Ben's college, the local Dunkin' Donuts gives a 10% discount to students. Is this price discrimination? Why or why not?

In a market with _______________, there are many firms providing differentiated products.

Raymond estimates the fixed costs associated with opening a new bank branch are $500,000. He estimates the branch will attract 1,000 new customers who will cost $50 / year to service each of their accounts. He also expects to generate $100,000 in fees annually from these accounts. What will be the total cost of opening the new branch and remaining open for one year?

Marlie designs and manufactures specialty furniture. She has a number of unique products but can only produce in limited quantities. Marlie will probably NOT use a market penetration strategy because

In U.S. markets, there are many substitute products for Fruit Loops cereal, suggesting the price elasticity of demand for Fruit Loops is high.

Cheryl wants to quickly establish a dominant market share for her new line of ergonomic pens. To do this, she will likely use a market penetration pricing strategy.

_________________ measures consumers' sensitivity to price changes.

Mario is the first retailer in town to sell games for Sony's new PlayStation 3 machine. Mario wants to quickly capture as much of the market for the new games as possible. Mario will likely use a __________ pricing strategy.

A customer orientation toward pricing implicitly invokes the concept of

Unlike product, promotion, or place, price is the only part of the marketing mix

Odd prices suggest low quality.

Because there are only a few firms in markets with oligopolistic competition,

__________ is the practice of colluding with other firms to control prices.

Frank's Heating and Air Conditioning Company specializes in electric heat pumps. Frank keeps track of the price of natural gas, knowing that

The full price of a product or service includes all of the following EXCEPT

The more substitutes that exist in a market,

Small business consultants are constantly admonishing would-be entrepreneurs, "Beware of the overhead." Using an overhead of $100,000 and then an overhead of $200,000, with a contribution per unit of $50, determine the break-even points.

Earl was known for driving 30 miles to save a dollar on the price for his favorite beverage. Earl perceived price as ________________, while most consumers recognize price as the ______________ made to acquire a good or service.