Exam 39: Setting the Right Price

If a marketer decides to price goods at odd-numbered dollar amounts to denote bargains and at even-numbered amounts to denote quality,he or she is using:

All of the following are tactics for fine-tuning the base price EXCEPT:

When Microsoft introduced its Zune MP3 player,many people thought it would capture the MP3 player market by pricing its product so low that a smaller competitor,like the Apple iPod,would be unable to compete.If Microsoft had used this approach,it would have been would be guilty of:

When a channel intermediary is compensated for the ordinary services and tasks performed within the channel of distribution,the compensation usually comes in the form of a discount from base price.This discount is called a:

_____ occurs when a firm is customer driven and seeks to understand the attributes customers want in the goods and services they buy and the value of those attributes to customers.Thus,the price of the product is set at a level that seems to the customer to be a good price compared with the prices of other options.

Price discrimination can sometimes be justified if certain criteria are not met.

Two effective pricing tactics that can be used to hold or build market share during a recession are:

If a manufacturer designates a shipping point from which to calculate all freight charges and charges customers the freight costs from that point (even if the goods were shipped from another location),the manufacturer is using _____ pricing.

One pharmaceutical manufacturer did not price a new antiulcer drug by adding up the costs of developing and manufacturing the medication and tacking on the amount of profit it wanted to make.Instead,the company justified a higher price than it might otherwise have been able to get from medical insurers by using studies that showed the new drug could help patients avoid expensive surgery and save the insurance companies money.The pharmaceutical company used:

Louisiana State University (LSU)football season ticket holders have to pay a fee (also known as a "donation")to the LSU Foundation every January,which is not deemed to be part of the ticket price.They pay for their tickets later in the year for the next football season.The Foundation fee must be paid in order to retain the rights to purchase a season ticket.LSU is using:

Pharmacies are a new addition to Sam's Clubs.They could exert a greater influence on the marketplace for prescription drugs than their newness indicates.Sam's has a stated philosophy of marking up merchandise a maximum of 14 percent.When that philosophy is applied to prescription drugs,especially generics,warehouse club prices can be dramatically lower than those of conventional drugstores,supermarkets,or discount store pharmacies.Sam's is using a _____ strategy to convince consumers to use its pharmacies rather than its competitors.

Which of the following is a price tactic that offers all goods and services at the same price (or perhaps two or three prices)?

After establishing pricing goals,managers should estimate total revenue at a variety of prices.Next,they should _____.Only after performing this task are they are ready to estimate how much profit and how much market share can be earned at each possible price.

With _____,the seller pays the actual freight charges and bills every purchase with an identical,flat freight charge.

State laws that put a lower limit on wholesale and retail prices are called _____.In states that have these laws,selling below cost is illegal.

Apple iPhone Apple, Inc.'s iPhone first went on sale on June 29, 2007. Apple's loyal and enthusiastic customer base is known for rushing to purchase its new products, and the iPhone enjoyed a tremendous amount of buzz before its introduction. As expected, the iPhone entered the market at what many believed to be a high price ($599). However, within weeks, the price was reduced to $399. By the end of 2007, over eight million iPhones had sold in the U.S. marketplace. By most, if not all measures, the original iPhone was a huge success for Apple and its then-exclusive U.S. carrier AT&T. On July 11, 2008, Apple, Inc. released the iPhone 3G, which it advertised as being twice as fast as the original iPhone for half the cost. However, in order to obtain an iPhone at the new price of $199, buyers had to agree to a two-year service contract with AT&T. This approach succeeded, and over a million iPhone 3Gs were sold during the introductory weekend. In 2011, the iPhone 4S-the fifth generation iPhone-led cellular phone sales with more than 25 million units sold. Several Android-based phones manufactured by Samsung were not far behind, however. -Refer to Apple iPhone.When the iPhone 3G was released at half the cost of the current iPhone,it appeared that Apple's strategic focus had shifted from maximizing profits to gaining market share.Its lowered price was consistent with the _____ approach.

A markdown allowance is a payment to a dealer for promoting the manufacturer's products.

An Internet picture frame manufacturer offers retailers reduced prices on any combination of size or style frames purchased.The discount is shown as they shop and adjusted as the quantity of frames purchased increases.What common form of purchase discount is the frame manufacturer using?

Which type of quantity discount is a deduction from the list price that applies to a single order?

All of the following are geographic pricing methods EXCEPT: