Exam 39: Setting the Right Price

Business-to-business salespeople often use _____ to increase demand for one or more products in a line.It is a discounting practice that is often done routinely without much forethought.

A(n)_____ allows for price increases based on the cost-of-living index or some other formula.

The owner of a neighborhood hardware store has decided to sell a set of three padlocks for $5.He hopes the below-cost price for the locks will attract current and new customers who will also buy regularly priced items.The owner is encouraging store patronage through:

For which of the following situations would a price skimming strategy be most appropriate?

Last year,a single infield box ticket for an Atlanta Braves baseball game cost $40,but fans who bought a season pass for the same seat got a reduced price.This $40 price was a _____ price.

Leader pricing is also called:

Which of the following is a pricing policy whereby a firm charges a high introductory price,often coupled with heavy promotion?

Uniform delivered pricing enables a firm to:

Art Supplies It's September and Sophia wants to buy some arts and crafts supplies for an after-school program she is developing for her daughter's elementary school. In her Sunday newspaper was a flyer from Michaels, an arts and crafts retailer. As she looked through the newspaper insert, she noticed that if she purchased three or more bottles of Alene's Tacky Glue, the regular price of $1.50 each was reduced to $1.15 each. She also saw that the store priced its plastic storage boxes at $1.99, $3.99, and $5.99. She thought they would be useful for storing each child's projects. On the front page of the flyer was an ad for Funky Girls Gel Pens, something she knew her daughter would love to use. The price at Michael's was $6.99 lower than the price she had found at the other stores that carried the pens. She thought that some of the older girls might like to start a scrapbook and was pleased to find that Michaels had a scrapbook starter kit, which includes scissors, book, pages, and stickers for only $15. The items could be purchased separately for $19.99. The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent. -Refer to Art Supplies.Which type of discount is being used to price the tacky glue?

The 99-Center is a retail store where all of the merchandise is priced at 99 cents.This retailer uses:

A penetration strategy tends to be effective in a price-sensitive market.Thus,one of the purposes of penetration pricing is to:

Manufacturers know the general price level they can expect when establishing a product price.This general price is called the base price.

How do value-based pricing,unbundling,and bundling help marketers hold on to market share during a recession?

Claxton Bakery recently began selling its fruitcakes online.If Claxton wants a simple pricing system that allows for different shipping charges depending on geographic segment or region,the company should use _____ pricing.

Price lining presents certain drawbacks to sellers,especially if:

JCPenney sends representatives to shop at similar retailers to make sure it is charging comparable prices for its products.JCPenney probably uses a _____ strategy.

_____ tries to get customers into the store with misleading advertising and then uses high-pressure selling to persuade the consumer to buy something else more expensive.

Name and describe the three basic strategies for setting a price on a new good or service.Under what conditions is each of the three basic pricing methods successful?

It makes the most sense to use price skimming when an above-average price makes the market hesitant to buy the product.

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.Best Buy also carries the iPhone.If Best Buy,Apple,and leading cellular carriers meet to agree on a price for the iPhone,they are likely guilty of _____.