Exam 37: Pricing Concepts

The most popular method used by wholesalers and retailers in establishing a sales price is _____ pricing.

Explain how the Internet and extranets affect price.In particular,how do shopping bots and business-to-business auction Web sites affect pricing?

The greater the number of different uses for a product,the more _____ demand tends to be.

Smelly Fruit At first glance, there is little to like about the durian. The durian is a fruit popular in Thailand that is spiky outside and stinky on the inside. When confronted with the durian for the first time, the Wall Street Journal recently reported that westerners often describe its distinctive sulphurous smell with words like stinky socks and manure. However, the durian is so popular in Thailand that one variety of the durian fruit, called the Kan Yao, has been selling for as high as $200. Even at that price, supply of the Kan Yao cannot keep up with demand. There are approximately 30 varieties of the durian grown in Thailand, with the most plentiful selling in the $15 range. The yellow flesh of the durian, the part you eat, has very powerful smell but possesses a sweet, nutty taste that Thais cannot seem to get enough of at any price. -Refer to Smelly Fruit.Suppose that you have decided to buy land in Thailand and become a durian producer.You see that the customary price for a Kan Yao is $200,so that is the price you decide to charge for your durian crop.This suggests you are using a _____ approach to setting your price.

Price should not be used as a promotional tool.

American Girl Doll The American Girl catalog began as a concept to introduce today's girls to those who lived in the past. Each historically accurate doll is carefully crafted and dressed and has books to describe her life. For example, Kristen is an 1854 pioneer girl who is growing up in Minnesota. Her story begins with her long sea voyage from Sweden. The basic doll, dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota, costs $90.00. Six more hardback books of Kristen's life are available for $74.95. Kristen's nightgown costs $20.00, and a matching one for the doll owner is an additional $38.00. Buy both together and the price is only $50.00. A hand-painted wooden bed and trunk for Kristen are available for $213.00. Shipping costs vary with the price of the merchandise ordered. -Refer to American Girl Doll.American Girl is the primary seller of historically accurate dolls with accompanying books in a market where there is very little competition.It has no cash flow problems and is not interested in maximizing its sales.From this information,you should know American Girl has _____ pricing objectives.

One of the most stressful and pressure-filled tasks of the marketing manager is attempting to set the right price.Specify three aspects of the current pricing environment in consumer markets that have contributed to the difficulty in setting correct prices.

A company using market share pricing has a _____ pricing objective.

_____ determine what sales volume must be reached before the company's total revenue equals total costs and no profits are earned.

_____ is the quantity of a product that will be offered to the market at various prices for a specified period.

Profit maximization is the price at which supply and demand are equal,and there is no inclination for prices to rise or fall.

Regency,Inc.makes disposable cap and gown sets for graduations.Each cap and gown set sells for $15.The average variable cost for manufacturing ten cap and gown sets is $100.Total fixed costs for the year equal $65,000.Calculate the break-even point in units.

Tesla Motors "Going green" doesn't have to be boring. The Tesla Roadster Sport is an electric car that goes from 0 to 60 in four seconds and drives more like a race car than an environmentally friendly ride. But that level of performance will set you back $128,500. As of 2009, Silicon Valley-based Tesla Motors, Inc. was the only company offering highway-compatible electric cars. Most Roadster Sport buyers are car enthusiasts and are buying them for the "fun toy" aspect of having an electric car rather than for environmental reasons. -Refer to Tesla Motors.What is the fixed cost contribution for the Roadster given average variable costs of $50,500?

What is a break-even point? The Catera Company makes and sells cotton candy machines.What is the break-even volume for Catera machines in units?

If price goes up or down and revenue stays the same:

Monthly output at Leisure-Time,Inc.changed from 12 to 13 prefabricated gazebos,and the total costs changed from $9,000 to $10,500.What is the marginal cost for this company?

Specialty Cakes Imagine that you're planning an after-symphony fund-raising party, and you need a life-size grand piano cake. Or, you are a developer proposing a new shopping center to a group of investors, and you want to serve a cake shaped like an architectural rendition of the center. Is this impossible? No, you just need to contact Cecilia Villaveces Cakes. She actually built a life-size grand piano for a gala in Macon, Georgia. You can expect to pay anywhere from $75 to $10,000 for one of Cecilia's artistic creations, depending on complexity of design and size. She uses only the best ingredients, and no two cakes are ever quite alike. -Refer to Specialty Cakes.There are many occasions for which people may need to buy a cake,but most people do not have the time or interest to learn about cakes and their bakers.These people who do not know about the quality of the Cecilia Villaveces Cakes might choose them because they:

For a nail salon,the costs associated with the purchase of nail polish and other products like nail polish remover,sterilized equipment,laundry service for the towels,and the beverages given to customers,are all examples of _____ costs.

American Girl Doll The American Girl catalog began as a concept to introduce today's girls to those who lived in the past. Each historically accurate doll is carefully crafted and dressed and has books to describe her life. For example, Kristen is an 1854 pioneer girl who is growing up in Minnesota. Her story begins with her long sea voyage from Sweden. The basic doll, dressed in a calico dress and striped apron plus the hardcover story of how she got to Minnesota, costs $90.00. Six more hardback books of Kristen's life are available for $74.95. Kristen's nightgown costs $20.00, and a matching one for the doll owner is an additional $38.00. Buy both together and the price is only $50.00. A hand-painted wooden bed and trunk for Kristen are available for $213.00. Shipping costs vary with the price of the merchandise ordered. -Refer to American Girl Doll.In terms of producing the doll and its accessories,the calico fabric used to make Kristen's dress is an example of a(n):

When Nesco brand food hydrators sold for $59.99,Nesco sold 90 dehydrators.When the company dropped the price of its dehydrators to $44.95,it sold 145 dehydrators.Demand for the food dehydrators appears to be: